Online payments are increasingly important as many transactions happen entirely online today. Online payment processors like PayPal are becoming an essential part of the business world. If you want to become a PayPal investor, we’ll explain some easy ways to add it to your portfolio.
For help investing in PayPal or anything else, consider working with a financial advisor.
PayPal Holdings is a financial technology company with an online payments system. PayPal’s technology is available in most countries that have online payments. In its early years, PayPal was a subsidiary of eBay, but it later became an independent company.
PayPal was founded in 1998 as Confinity by Peter Thiel, Max Levchin and Luke Nosek. In 2000, Elon Musk became PayPal CEO after it merged with Musk’s company, x.com. Since 2008, PayPal has acquired several companies, including Venmo, Bill Me Later and Xoom. Its revenue is more than $25 billion as of 2021.
Why Investors Want to Buy PayPal Stock
PayPal is naturally one of the first choices for anyone who wants to invest in online payments. It is one of the largest players in this space along with its subsidiaries. In addition, the company has steadily increased its revenue and net income over the years.
PayPal stock (PYPL) fared extremely well when the COVID-19 pandemic forced people to do nearly everything online. Its share price increased from less than $90 at the start of the pandemic to over $300 by the summer of 2022. However, its stock has lost all of that growth since then; its current price is about the same as at the start of the pandemic.
But if we zoom out, we see that PayPal went public in 2002 at a price of $13 per share. Thus, it has increased about six times in 20 years. For comparison, the S&P 500 has increased by about 3.5 times since 2002.
How to Invest in PayPal Stock
Make sure you do your homework before investing. Here are some steps to consider:
- Research the stock: While there are things to like about PayPal stock, you should ensure it aligns with your investment goals. Be sure to review its fundamentals and consider diving into documents such as its SEC filings, such as annual reports (10-K) and quarterly reports (10-Q).
- Open a brokerage account: If you don’t already have a brokerage account, you should open one to hold your investment. The best choice differs for every investor; SmartAsset breaks down the best brokerage accounts.
- Purchase your stock: One way to buy PayPal stock is to search for it directly by its symbol (PYPL). Alternatively, you can buy PayPal stock as part of an ETF. Some ETFs that include PYPL are PNQI, BPAY and STCE.
- Monitor the stock: Buying shares of PayPal stock is hardly the last step. You should monitor the stock to ensure it continues to meet your investment goals, rebalancing if necessary. If you find yourself at odds with the stock, you can consider selling it.
Is PayPal Stock a Good Buy?
PayPal stock could be the right choice if you are determined to invest in online payments. Its trailing 12-month net income has been positive in every quarter going back to 2015. That figure has been trending upward since then, though it declined in the post-pandemic economy. However, its net income ticked up again in the latest quarter.
Like most companies, PayPal has had its ups and downs. Generally, it makes sense to cover your financial bases before investing in individual positions, but we suggest reviewing your situation with a financial advisor. Here are some steps to consider first:
If you have all of these covered and still have money to spare, follow the steps above and add money to your brokerage account. Then, you can invest in some individual positions with the understanding that these investments. Remember that individual stocks tend to have a higher level of risk than traditional investments, such as mutual funds in your retirement plan.
The Bottom Line
PayPal is a financial technology company focusing on online payments. One of the largest payment processors, PayPal owns other notable names, such as Venmo and Xoom. Buying PayPal stock can be as easy as buying shares of PYPL, or you might choose to buy them in an ETF. Now that you learned how to buy PYPL stock, the next step is to talk to a financial advisor to discuss how this investment may fit into your portfolio.
- Financial advisors help investors analyze various investment options and create a plan of action to meet their goals. Finding a qualified financial advisor doesn’t have to be hard. SmartAsset’s free tool matches you with up to three financial advisors who serve your area, and you can interview your advisor matches at no cost to decide which one is right for you. If you’re ready to find an advisor who can help you achieve your financial goals, get started now.
- When investing your money, it is important to diversify your assets among many different types of stocks and bonds. This helps you gain exposure to multiple sectors of the market and benefit from their growth. Our asset allocation calculator helps you select a profile that’s right for you based on your answers to simple questions.
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