My six-step guide will make purchasing Direct Line shares as easy as pie.
Direct Line is a popular insurance company based in Bromley, England. Some of you may know it by its red phone mascot, but many of you will know the Churchill dog and Churchill Insurance, which is a sister company to Direct Line
I’ll also give you price data and analysis based on my research. To learn more and find out how you can buy Direct Line shares online, keep scrolling.
Also consider: My best stocks and shares to buy now
- Pick a trading platform that’s right for you. You can learn more about the best investment platforms. Orread this guide to the best trading platforms I recommend.
- Open your account. Before you begin, you will need your personal ID, national insurance number, and bank details.
- Enter your payment details and add funds to your trading account using a debit card or bank transfer.
- Look up the stock code to find it. Direct Line is listed on the stock market under the ticker “DLG”.
- Research. Your chosen platform will provide the latest information about Direct Line, including news updates, earnings reports, and its share price history.
- Open a position i.e. buy/sell shares.
Direct Line (DLG) share price
Below you can see Direct Line share price live, subject to stock exchange times and data update frequency.
There are six steps you need to follow if you want to buy or sell Direct Line shares. Each step is as important as the next, so make sure you take note of what to do at each stage of your journey with this company.
1. Choose an investment platform/trading platform
If you want to buy shares (i.e., own the underlying asset), use an investment platform. Shareholders own a stake in the company and can be entitled to things such as a dividend. If you want to trade (i.e., speculate on the price going higher or lower because you don’t own the underlying asset), use a trading platform.
How to find your ideal platform
I suggest reading my guides to investing and trading so you can understand how each system works and, in turn, which is best for you. Once you’ve decided, read my app reviews to find out what the trading platforms offer. The main points I look for (and you should look for) when reviewing brokers are:
- The financial securities you can invest in/trade i.e. is there a full range of stocks available.
- Costs i.e. how much do you pay in fees to invest/open trades
- What are the fees? This includes, account fees, deposit/withdrawal fees, monthly usage fees, and inactivity fees
- Some trading accounts require you to have a minimum balance to cover potential losses on leveraged positions. This isn’t necessary with investing
- Does the site offer education and analytical tools?
When you’ve found a platform you like, use the links within my reviews to open the sign-up page and start the registration process.
2. Open an account
Opening an account requires you to input some personal and financial information. Every investment and trading platform I recommend is fully licenced and regulated. As such, you must confirm and verify your details. Once you’ve created an account, sign in.
*If your account login failed, remember to contact the broker’s support team.
3. Enter payment details
You need cash in your account to buy and sell Direct Line shares. Licenced brokers are required to hold your money in ring-fenced accounts. This means deposits are insured up to a certain amount. The main ways to make deposits are with debit cards (Visa and MasterCard) and Apple Pay or Google Pay.
*If you’re buying US stock, you’ll need to complete a W-8 BEN tax form. Direct Line Holdings Plc is listed on the London Stock Exchange, so this isn’t necessary.
4. Search for the stock code
The quickest way to do this is to enter the ticker “DLG“.
5. Research Direct Line shares
Investing and trading have a certain amount of risk, so you need to understand the proposition before you make a financial commitment. It’s hard to accurately measure risk, and you can’t remove it, but you can do your best to control it.
Some of the things I suggest looking at when assessing a company are:
- Look at recent income statements to see its profitability and growth/decline
- The current share price vs. historical highs and lows
- Read what experts have to say about Direct Line Holdings Plc and stocks within the same sector
- Use analytical tools on price charts to carry out technical analysis
6. Open a position on Direct Line Shares
When you’re sure you want to buy or trade shares, open your position by inputting your stake. Then, when you’re ready, you can close a position.
Valuing a company isn’t easy. Still, based on the buy/sell prices being traded when I carried out my analysis, it may be slightly undervalued right now. Analyst forecasts for May 2023 issued a hold rating with the share price at 160.50 GBX and a price target of 196.90 GBX.
Prudential has the biggest market cap among UK insurance companies at £31.7 billion (i.e., it has more capital and assets than others in the sector). The market cap for Direct Line during this period was £2.1 billion.
You can also look at the share price history to get an idea of its historical returns, both in isolation and for companies in the same sector. My analysis found:
- One-year = -34.31%
- Five-year = -57.01%
From this, I can say shares haven’t offered positive long-term returns in recent times, but this may not always be the case as the financial health of a company fluctuates.
Profit vs. loss
How much profit does this company make? I looked at the company’s income statement for 2021 and 2022. Revenue in 2021 was £3.16 billion, which equated to £480.3 million in operating profit and £343.7 million in profit after tax. In 2022, revenue was £3.13 billion, with an operating profit loss of £24.7 million. Its profit after tax was £39.50.
In addition to the total amount of money made, you can look at the profit-to-earnings ratio (P/E ratio). The P/E ratio is calculated by dividing a company’s net profit per share. Direct Line’s average P/E ratio between 2018 and 2022 was 1.2x.
Its median P/E ratio during that period was 10.3x, and over the last five years, it peaked at 11.8x. You can expand on this idea by looking at the PEG ratio (price-earnings-to-growth ratio). Its PEG ratio (on average) between 2018 and 2022 was -1.91.
Note: All investments and trades carry risk, and past results don’t guarantee future returns.
Does Direct Line pay dividends?
Yes, it does. Dividends are paid from a company’s profit, so a high yield can be indicative of a profitable business. I found, through my research, that the Direct Line dividend yield in 2022 was 4.73%.
As I said earlier, you can buy direct shares and own them, or you can speculate on price movements by trading. The decision is yours, but here’s more information to help.
Publicly listed companies offer stock via an exchange. This stock represents a portion of ownership in the company. So, if you own stock, you own a percentage of the company. Owning shares means the value of your holding can increase as the company’s share price increases.
Similarly, if the company’s value drops, the value of your holding will decrease. What’s also important to remember is that shares in this company entitle you to a regular payment (from the company’s profits) known as a dividend.
Trading is, basically, the act of speculating on share price movements. You can use a financial product known as contracts for difference (CFDs) to speculate on the price increasing (a long position) or decreasing (a short position).
You don’t actually own shares with CFDs, so you don’t receive dividends. But speculating on the company’s value does give you the flexibility to make money when prices rise or fall.
When you trade, look at the difference between the price at which shares are being bought and sold by the broker. This difference is known as the spread, and it’s where a broker makes money.
What is the yield of Direct Line shares?
Is Direct Line a buy, sell, or hold?
The value of your investments (and any income from them) can go down as well as up and you may not get back the full amount you invested. Past performance is not a reliable indicator of future performance. Investments should be considered over the longer term and should fit in with your overall attitude to risk and financial circumstances.
A pension is a long-term investment not normally accessible until 55 (57 from April 2028). The fund value may fluctuate and can go down, which would have an impact on the level of pension benefits available. Past performance is not a reliable indicator of future results. The tax implications of pension withdrawals will be based on your individual circumstances. Thresholds, percentage rates and tax legislation may change in subsequent Finance Acts.