Buy or not to buy TUI shares? Our future forecast 2022!

Mark Norgate
October 10, 2021
The tourism company's share is relatively volatile and suffered heavy losses, especially in 2018. However, the low prices and the relatively high TUI share dividend are interesting for investors. So is it worth to buy TUI shares, or should you keep your hands off the company?
Buy or not to buy TUI shares? Our future forecast 2021!

Do you want to know the best TUI share price to buy and sell? Here you will find a realistic forecast for the TUI share price, key figures and the opportunities and risks of the tourism company in the present and near future.

TUI is a company that is well known as a classic German travel brand in various segments. The company operates cruise ships, hotels, airlines and travel agencies. As one of the largest tourism companies in Europe, the company has a market value of USD 14 billion.

The tourism company’s share is relatively volatile and suffered heavy losses, especially in 2018. However, the low prices and the relatively high TUI share dividend are interesting for investors. So is it worth investing in a TUI share, or should you keep your hands off the company?

Table of Contents

Buying TUI shares – what should you watch out for?

You should pay attention to the following points when buying TUI shares:

  • Why should you invest in TUI shares? Due to Corona, the share is currently severely undervalued. Currently, you can buy the share very cheaply and sell it at a high price as soon as the pandemic is over. As Europe’s largest tourism company, it is unlikely that others will dispute this rank for you due to the pandemic.
  • Where can you buy TUI shares? TUI shares can be bought from any online broker. However, we recommend our test winner broker Roinvesting. In our opinion, Roinvesting is the absolute best stock broker, as you can buy stocks and ETFs here completely free of charge.
  • What can the future of TUI shares look like? TUI has crashed extremely due to the global pandemic. Once the pandemic is over, we expect the stock to appreciate highly in value.

Where and how to buy TUI shares? Best brokers in comparison:

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Buying TUI shares in 3 steps: Our guide

1. Registration with a broker

In order to be able to buy the TUI share, you first have to register with a broker. It is advisable to pay particular attention to the deposit protection; should the broker go bankrupt, the shares still belong to you. Anyone who waives this deposit protection will be left without shares in the event of the broker’s bankruptcy.

If stock selection and evaluation are too complicated, a social trading platform can also be a good solution. Here you simply follow an experienced trader and automatically copy the trader’s trading decisions.

Our broker recommendation at this point is Roinvesting – with state-guaranteed deposit protection of up to 20,000 euros and 0% commission when buying shares, Roinvesting is our test winner broker. To register with Roinvesting, click here.

If you have decided on a broker, you log in with your data and verify your email address as well as any other data.

ROinvesting

2. First deposit

After registering, you need to decide how much to invest in stocks. We generally recommend that you never invest more than 5% of your capital in a single share.

Once you have decided on the amount you want to invest, click on the ” Add Money ” button after registering with Roinvesting.

You can now choose from various deposit methods, including PayPal, credit card or bank transfer.

Below is an overview of all the payment methods available at Roinvesting:

Payment optionPossible?
Buy TUI shares with a credit card✔️
Buy TUI shares with PayPal✔️
Buy TUI shares with Skrill✔️
Buy TUI shares by bank transfer✔️
Buy TUI shares with Neteller✔️
Buy TUI shares with UnionPay✔️

3. Buy TUI shares online

Now that your money has arrived enter the name of the stock you want to buy in the search field at the top. Then press the blue “Trade” button in the upper right corner.

A small window will open where you can set the price and number of shares you want to buy. You can also set stop loss and take profit, i.e. at which price the share should be sold again in the event of a profit or loss. The two fields are optional.

The Leverage field allows you to control whether you want to buy the real share (x1 leverage) or a CFD (x2 or more leverage).

With a click on ” Place order ” the purchase is completed, and the share appears in your portfolio.

TUI share price, price & key figures

How much can the company be impressed with TUI share key figures? What strengths does the company have that reappear in the TUI share key figures? The most important TUI share key figures at a glance:

  • Negative earnings growth of -38.20% in 2015/16
  • Strong earnings growth of 13.63% in 2017/18
  • Very tentative profit growth of 1.69% in 2018/19
  • Equity ratio of 27.75% in 2017/18
  • Gearing of 260.25% in 2017/18

TUI share key figures

The TUI shares key figures to speak for themselves. The company has had a turbulent TUI share history and experienced strong profit and loss phases. As you can see, the equity ratio is relatively low at less than 30 percent. The high level of debt also affects the company and is particularly a hindrance in future possible loss phases.

The TUI share key figures show that the company was anything but stable. Although there was strong growth, severe losses also had to be accepted. Overall, the TUI shares key figures that reflect the level of difficulty of the entire tourism industry very well.

It is particularly difficult for giants like Thomas Cook and TUI to actually make a profit. Often the profits are moderate in good years, but the negative growth and losses in peak years are very high. This should be included in the TUI share pros and cons.

TUI share dividend 2016 to 2021:

Dividend per shareReturn in%Year
** 0.02** 0.432021
002020
0.294.852019
0.44.282018
0.364.562017
0.344.882016

In view of the low price of TUI shares, currently, at around 9.47 euros, the TUI share dividend is very good. In 2018, the company paid a dividend of EUR 0.36. That’s a 4.56% dividend yield per year.

In view of the very good economic outlook for 2019, the company states that it will issue a TUI share dividend of 4.85% (0.29 euros) for 2019.

How much TUI does the portfolio include?

How to buy TUI shares is a question that is often asked, but in view of the TUI share key figures and points of criticism dealt with in the article, it is quickly discarded. In fact, as a motivated investor with a willingness to take risks, you can also consider making a deposit with a CFD broker. This is, for example, the broker E-Toro. Here you can, for example, trade CFDs (Contract for Difference).

This enables “shorting”, for example, on the TUI share price. So you can generate profit by a falling price. If you want to make an investment in general, even a TUI share investment; you should only invest so much that you can financially tolerate a total loss.

Buy or not to buy TUI shares? Our future forecast 2021!

TUI Aktien Forum – advantages and disadvantages

  • Well-known and large airline
  • Undervalued by Corona
  • The company’s low-profit return
  • Moderate gains in the record years of 2018, 2019
  • Tourism industry in general is in bad shape, and competitor Thomas Cook Group is not doing particularly well financially.

TUI share real-time buying arguments

Should you decide to buy TUI shares? There are currently some arguments in favour of buying TUI shares that should not be ignored. However, while the TUI shares pros and cons, there are quite a few facts to weigh against each other.

Strong travel year 2019 expected.

TUI management is very optimistic about 2019. The Germans’ willingness to travel would increase significantly. This is particularly true of Egypt. The country should be visited as often in winter as in summer. Otherwise, Turkey can also shine with strong double-digit growth figures.

Trips to Cyprus also rose by 17 percent, which should have more weight in the TUI share pros and cons comparison given the longer flight distance. Spain is still number one in terms of popularity with TUI travel. Second place went to Greece. A total of four new TUI family houses will be built in both countries this year.

2018 was already a year with record numbers in tourism. But the industry is still growing. For 2019, the Group is forecasting increasing TUI share key figures in terms of bookings, customer base, sales, and return on sales. Last but not least, long-haul flights should contribute to increased sales. These include Jamaica, Maldives, Indonesia, Mexico and the USA.

Trust in the share – the main shareholder continues to increase

The main shareholder Alexej Mordashov sees the advantages of the TUI shares clearly outweighing the pros and cons. That is why the Russian billionaire decided to further increase its own stocks in the past few weeks (February 2019). Previously, the investor-owned 25% of the company.

Big investment in Cape Verde – For long-term growth

The Cape Verde Islands near the West African coast are one of the best thriving regions in Africa. TUI is planning to build the first TUI Magic Life Club on the second largest island in the archipelago. Specifically, this should be more than 575 rooms will be added. In total, TUI will then already have seven locations on the archipelago. Today, around 350,000 people travel to the archipelago, emphasising Sebastian Ebel, TUI board member responsible for “Hotels & Resorts”.

Because the hotel business accounts for around 40 percent of TUI’s total turnover and the proportion is expected to increase, the expansion in the booming Cape Verde region can be seen as a positive factor for increasing profits in the long term.

Buy or not to buy TUI shares? Our future forecast 2021!

 

Sell ​​a TUI share? Sale arguments

Should you currently avoid a TUI share investment and instead sell TUI shares, should you already have them in your own portfolio? In any case, a few facts speak in favour of this, especially on a long-term basis.

Low return on sales

The problem of return on sales is not a problem that is limited to TUI alone. Rather, it affects the entire aviation industry and, to a large extent, the entire tourism industry. Although the sales of countless companies in the air traffic and the hotel industry are often enormous, the remaining profit is relatively small. This is also shown very clearly by the TUI share key figures. The gross return on sales is only 4.98%.

Given that 2018 was a very strong year, this is not a particularly high number. In fact, the value was much lower in previous years. In 2016 the value was only 3.6% (gross!), In 2013 it was only 1.76%.

Safe TUI share dividends?

The TUI share dividend is very high, with a planned dividend yield of 7.8%. That sounds tempting, but it can also be interpreted very well as a lure. The company has officially issued high TUI share dividends in the past. However, some of them have not yet been distributed, which annoyed many shareholders. Therefore, to a certain extent, the TUI share dividend acts as a lure in a company that otherwise cannot always shine with particularly good TUI share key figures.

TUI turnover is not increasing at the expected pace

TUI can present growing sales, but TUI share earnings overall and per share are much lower than previously planned. The company openly admitted this at the beginning of February 2019. The company’s management aimed to achieve an average EBITA growth of 10% in the three years up to 2020. The target has finally become unrealistic with the 2018/19 financial year. In the 2015/16 financial year, TUI only achieved an EBITA growth of 8.63%; in 2016/17, it was 8.22%.

In 2017/18, the company was able to show growth of just 4.97%. The final admission that the business targets cannot be met by 2020 resulted in a 16% decrease in the TUI share price on the day of the announcement.

Moderate profits in record years

As mentioned before, the tourism and flight boom in 2018 and 2019 was very noticeable. However, despite the fact that more and more people are booking long and short-term flights, TUI share earnings are growing only moderately. In view of the high number of flights, TUI was only able to benefit moderately.

Tunisia, for example, increased the number of passengers from abroad by more than 49 percent. This shows once again that TUI is only benefiting less than average from the tourism boom in countries that can be reached by short and long-haul flights. Countries in which TUI actually had resorts and hotel complexes in the mid-range and premium range.

Investing in TUI shares – yes or no?

Should you choose a TUI share investment? Our TUI share forecast shows that a purchase is currently not paying off. The reason is primarily that the risk of a TUI share investment is not in relation to the expected TUI share profit in the optimal case. The biggest reasons are summarised here again:

TUI share news & history

TUI shares history is characterised by turbulence, sometimes high profits and consistently high losses. In the past few years, in particular, the entire travel industry had very often been confronted with low returns on sales, despite cheap kerosene. Unfortunately, this can also be seen very clearly in the history of TUI shares.

This is due, among other things, to the increasing competition, which is expressed in tough price wars. In addition, the possibility of comparing prices via the Internet makes it much easier for consumers today to take advantage of remaining stock and particularly cheap offers. As a result, offers with a high-profit margin are often used less often, increasing profit.

Empty hotel rooms in the off-season are often the reason why the financial year hardly generated any profit or even loss.

Not least, crises of a military or political nature are the reason for the problems that the TUI Group has to confront. For example, the Syrian civil war had a negative impact on business in North Africa, as can be seen very well from the TUI share history.

TUI share forecast 2021

How will the group develop in 2021? What development will the TUI share price follow? The risk that the TUI share price does not go as expected, for example, because the Group ultimately changes the TUI share dividend due to poor returns, is relatively high. Nevertheless, it is quite possible that the company can continue to grow in 2019.

Overall, therefore, you can possibly make a significant profit on TUI shares in 2020. However, according to our TUI share analysis, the risk is not worth it. As before, the long-term situation in the TUI share pros and cons comparison is much worse than forecast in 2021.

Because especially the high debt, the low equity ratio and the failure to achieve profit growth targets are factors that do not speak for the group in the long term, this is very challenging, especially in the competitive and insecure tourism industry. Here the return on sales is often low, as has often been shown in the history of TUI shares.

Fees when buying TUI shares

We compare the fees of the largest brokers with the following example:

  • Purchase of TUI shares worth € 1,000
  • Hold the TUI share for one month and then sell
  • No course changes in the 30 days

With these assumptions, we now compare the fees of Libertex, Roinvesting & Plus500 :

ProvidersLibertexRoinvestingPlus500
Depositfor freeFor freefor free
Purchase fees€ 2.20free3.08%
Holding feesfor freefree0.05%
Sales charges€ 2.20Spreads3.08%
Total fees€ 4.40Reasonable€ 92.32

Buy or not to buy TUI shares? Our future forecast 2021!

Conclusion – TUI share valuation

How to buy TUI shares is currently a question that is absolutely not worth asking. A short-term investment in the company is very risky and does not look good given the potential profit. However, if you still ask yourself how to buy TUI shares, the solution is often a solid online broker. TUI shares where to buy are then clarified very quickly. Alternatively, you can also buy shares through your own bank branch, but this is often associated with higher fees.

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FAQs

The TUI shares are to be traded, so investors naturally wonder whether they should expect a dividend. TUI holds its general meeting regularly. A dividend is then paid out.

In the past few years, the TUI share has picked up more and more momentum. The investment should therefore still be worthwhile.

The TUI share is listed on the Frankfurt and Stuttgart stock exchanges and can be traded there.

In the article, some ways are presented how you can quickly get hold of your own TUI share. If you do not want to purchase the share directly, you also have the option of using CFDs to bet on rising or falling prices.

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