As one of the tech world's leading image-sharing and social media sites, Pinterest (PINS 2.25%) might have caught your eye as a potential addition to your investment portfolio.
Here, we'll go over how to buy Pinterest stock on an online brokerage platform, whether you should invest in Pinterest, if Pinterest is profitable, and whether Pinterest pays a dividend.Pinterest may make for a compelling investment idea for some growth investors. As with any investment, be sure to have done your research first.
How to buy
How to buy Pinterest stock
If you've made the decision to add Pinterest to your portfolio, you'll first need to pick a brokerage to make your trade.
In the below screenshots, we'll use Fidelity since they're one of the most popular online brokers. You might also consider providers like Vanguard or Charles Schwab to place stock trades.First, navigate to Fidelity's website. Then, select "Trade" from the toolbar at the top of the screen.
For "Trade," be sure you have "Stocks/ETFs" selected. Then, make sure to select the appropriate account containing the funds you intend to invest.
In the "Symbol" field, type PINS (Pinterest's stock ticker) to code the ticket properly. As the image below shows, you'll see the company name populate as well as recent pricing, volume, and other company-specific trading data.
In the "Action" field, select "Buy."Then, to determine the quantity to buy, divide the amount you plan to invest by the stock's current price. For instance, if you want to invest $1,000 into Pinterest's common stock, divide $1,000 by $27.45. This leads to a quantity of about 36 shares. (You can also check with your broker to see if you can purchase fractional shares.)
For order type, select "Market" if you want the order to execute at the best available price. The order will likely execute in seconds if you choose this option and send in the trade ticket.Finally, "Time in Force" should show "Day" if you're working with a market order. A "Day" order means that the order is good for the remainder of the trading day; in all likelihood, the order will execute quickly, and you won't need to worry about it carrying over to the following day.
Should I invest?
Should I invest in Pinterest?
As with any investment decision, it's smart to do a fair amount of research before making a trade. The decision around Pinterest stock is no different, and whether it's the right pick for you is entirely subjective. However, there are a few reasons Pinterest might be interesting to you as a portfolio addition.If you are an income investor looking for monthly or quarterly cash flow, Pinterest isn't the best bet. Since Pinterest is a growth stock in the tech space, you shouldn't expect a dividend payout anytime soon. You might consider looking at some of the blue chip dividend payers, like defensive stocks in the utilities and/or healthcare sectors.
On the other hand, if you're a growth investor, Pinterest might be worth a flier. The company has doubled its revenue to just less than $3 billion in only a few years, and the company's business has thrived alongside a robust and growing user base. Pinterest also offers a relatively unique product offering and an attractive space for monetizable ads; here, there is great potential for further expansion.
All the while, Pinterest still faces a number of challenges. First, the company spends a great deal on marketing and other mechanisms to capture new users, which has translated into slim profit margins. Next, Pinterest competes in a space with both Instagram and TikTok, two giants in the visual search sector. Finally, as tech has spiked and fallen over the last few years, any potential investor should be prepared to deal with some amount of volatility in the stock.
In the end, the decision to invest in Pinterest is a personal one. No matter what you ultimately decide, be sure to understand how the stock would fit into your portfolio as a whole.Pinterest has also shown a unique ability to increase its revenue, taking gross sales from $1.1 billion in 2019 to $2.8 billion in 2022 during global recession fears and a faltering stock market.
Much of what's behind Pinterest's 2022 loss has to do with its non-operating expenses amid an inflationary environment.
There is a reasonable chance that Pinterest may return to profitability in the near future. The company boasts 435 million monthly active users, or MAUs, which are attractive for advertisers, affiliate marketers, and potential brand partners.Above all, Pinterest offers a centralized space for sellers to promote products and for advertisers to lock onto a particular target audience. This makes it a compelling option from a revenue perspective.
Still, its uneven profit history, as well as its high valuation, make it a challenging investment call.Does it pay a dividend?
Does Pinterest pay a dividend?
No. As a growth-focused company, Pinterest does not pay a dividend to its shareholders.
This doesn't necessarily mean that Pinterest will never pay a dividend, but it's a safe expectation that they won't be paying one anytime soon.
ETF options
ETFs with exposure to Pinterest
Pinterest may seem like a compelling investment to you, but it's understandable that you may not want direct exposure to the stock itself. The company's performance has been uneven at best, and you may not want to watch your investment portfolio whipsaw back and forth on a daily basis.There are several ETFs (exchange-traded funds) available that include Pinterest as a major holding. First, the Global X Social Media ETF (NYSE:SOCL) has 7% of its funds invested in Pinterest, alongside other social media titans like Meta (META -1.59%) and Snap, Inc. (NASDAQ:SNAP).
Similar ETFs include the SPDR S&P Internet ETF (NYSE:XWEB) and the Invesco Dynamic Media ETF (NYSE:PBS). Each of these ETFs contains significant exposure to Pinterest, but investors wouldn't bear Pinterest's risks to the same degree as the company's direct common stockholders.
Overall, ETFs are generally sensible for investors who don't want direct exposure to any one particular stock but do see value in a specific theme (in this case, social media). Before investing in any ETF, make sure you understand its core holdings as well as its expense ratio (the amount you'll pay to own the fund).
Will the stock split?
Will Pinterest's stock split?
It's impossible to know if Pinterest's stock will split at some point in the future, but we do know that it hasn't split yet and doesn't have a split scheduled in the near future. s long as Pinterest shares can be had at a reasonably accessible price, a split remains unlikely.
Related investing topics
The bottom line
The bottom line on Pinterest
Pinterest common stock can make sense for some investors, but others might feel that the risks are too much to bear.No matter what you ultimately choose to do, make sure that you've first done your own research on the company and that you've made a commitment to holding the stock for the long term if you choose to buy it.A long-term horizon is key to successful investing and wealth creation. Once you make an investment decision, be prepared to hold it for a significant period of time to take full advantage of the potential benefits.
If investing directly in a company's common stock feels unnecessarily risky, consider adding ETFs or mutual funds to your portfolio for diversification.
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