How To Buy Tesla Stock

Tesla stock, which trades on the NASDAQ under the ticker symbol TSLA, recently hit an all-time high near the $1,000-level, generating major interest from retail investors in what is arguably the world's most innovative and polarizing automaker. The company, led by mercurial founder and CEO Elon Musk, produces and distributes three fully electric vehicles: the Model S sedan, the Model 3 sedan and the Model X sport utility vehicle (SUV).

The Palo Alto, California-based car manufacturer is one of the highest-profile Silicon Valley tech companies, and investors have enjoyed the stock’s jaw-dropping rally over the last decade. Tesla shares have gained more than 3,100% since going public in July 2010. However, the stock's ride up has neither been smooth nor steady.

The stock's insane run-up in price over the last decade is, like all investments, a bet on the future. As such, it helps to be comfortable with roller coasters if you want to buy Tesla shares. That’s because wild up-and-down volatile price swings have become a hallmark of the stock’s performance.

While the company’s forward-thinking innovations are an inspiration to many, others are less impressed. Tesla hasn't always been able to deliver on its production targets or its product roadmap. Novice buyers need to be aware that Tesla stock isn't a steady performer, though it has incredibly rewarding potential, as recent months have shown.

Buying and selling Tesla stock is easier than you might think. The process can be as simple as signing up for a mobile app. We'll discuss what makes Tesla a good buy, different ways you can purchase the stock, how to track your shares, and more.

Below, a step-by-step guide to getting started.

Is Tesla a good stock to buy?

As one of the leading innovators in the auto industry, Tesla has generated a lot of press in recent years. It has developed a loyal cult-like following of fans and enthusiasts who believe in the company’s technology and often laud CEO Elon Musk as a visionary, showering him with devotion and admiration. At the same time, the company has many vociferous critics who argue the electric vehicle pioneer could go bankrupt in the years ahead due to its soaring debt and high cash burn.

Before you load up on Tesla shares, there are a few things to consider. Analyzing a company’s financial statements is probably the single hardest part of researching the stock, but it’s also the most important. Tesla’s balance sheet, quarterly income statement and sales outlook will provide you with a clear breakdown of the company’s business.

If you like what you see, then you are one step closer to buying Tesla stock.

How much is a share of Tesla?

During January 2020, Tesla shares hit a big milestone, becoming the first $100 billion publicly listed U.S. carmaker in history.

After topping the combined market capitalization of Ford (NYSE:F) and General Motors (NYSE:GM), Tesla overtook Volkswagen (OTC:VWAPY) as the second most-valuable carmaker in the world. Japan's Toyota Motor Corporation (NYSE:TM), however, remains the world leader with a market value of around $199 billion.

Tesla Stock Chart

At its current share price of $771 as of yesterday's close, Tesla is valued at $140 billion. Tesla shares have more than quadrupled in value since falling to a 52-week low of $176.99 in June 2019.The recent rally, which saw shares soar 335% since June, was fueled by a surprise profit for the third quarter of last year, news of a production ramp-up in the company's China factory, better-than-expected annual car deliveries and excitement surrounding the company’s new “Cybertruck.”

How do I buy Tesla stock?

If you don’t already have a brokerage account, you’ll need to open one to buy Tesla stock. While opening an account may sound difficult step, it’s actually quite easy, and you can have everything set up in a short time.

In general, you’ll want a brokerage account with low or no trading commissions, useful tools and an account minimum you can manage.

The emergence of free stock trading apps, like RobinHood and Acorns, have made buying and selling shares significantly easier for the novice investor. Commission-free online brokers, such as TD Ameritrade, Charles Schwab, Interactive Brokers and E*Trade, are also good places to start.

After you’ve opened your account, you’ll want to fund it with enough money to buy Tesla stock. Once you’ve made your purchase, you can sit back and track the stock price using your portfolio on Investing.com.

Does Tesla pay a dividend?

A dividend is generally defined as a payment made by a corporation to its shareholders. In the simplest terms, it refers to your share of a company's profits. So, if a company declares a 50-cent quarterly dividend and you own 100 shares of that company, you will receive a $50 payment every three months.

The appeal of high-growth stocks like Tesla is that they have the potential for huge returns via escalating share prices. However, they typically do not offer investors the steady income of regular dividends. The company has never declared dividends on their common stock. Tesla has stated in the past that it intends on retaining all future earnings to finance future growth and therefore, does not anticipate paying any cash dividends in the foreseeable future.

The best dividend stocks tend to be older, more established companies. You can use Investing.com’s stock screener and dividend calendar to find stocks with upcoming dividends.

Bottom line

Buying and owning Tesla share can be exciting. But it comes with some risks as well. It is important to remember success won’t happen overnight when dealing with a volatile stock like Tesla. Investors should take a long-term approach on their investment, especially if they believe in the company for the long haul.

Overall, the process of buying and selling stocks is not as difficult as newcomers expect and the good news is that it keeps getting easier thanks to improving accessibility to investing in the stock market.