How to invest in Google shares from India? GOOG vs GOOGL?
April 27 2022 - Team Stockal
Invest in Google shares from India
If you are searching for one of the most valuable publicly-traded companies, you will find Google – now known as Alphabet – in that list. Most likely, you would be searching for the company on the company’s web page itself. But don’t worry, more than 3.3mn searches are made on Google every day. Ironically, Google has become the synonym for search. However, outside of the title of being the most popular search engine, Google is a tech giant progressing in the field of smartphones, AI, healthcare, and advertisement. The majority of the revenue of Google comes from the online advertisement segments, Google AdSense and AdWords.
With the advantage of a significant revenue source from the ad business, Google has the edge over its competitors. This also provides Google with a good backup and cushions for its other business ventures. The world’s biggest investor, Warren Buffet, believes that Google’s larger profitability puts the company one step ahead in the game. Since its listing in 2004, the Google stock has generated a return of 4,610% until March 2022. With its dominance in the business, future growth prospects for the company also look promising. However, since the company is listed in the U.S. stock exchanges, how can you invest in Google in India?
Let’s find out.
Can I invest in Google shares from India?
Many investors in India are willing to invest in Google, but their biggest concern is not knowing how to buy the shares in India. We are here to tell you that you can very easily invest in Google shares from India. There are three ways in which you can do that. You can either buy their shares directly from the U.S. stock exchange, or invest in the U.S. ETFs that hold Google stocks, or purchase the units of Indian mutual funds that invest in Google.
Directly purchasing the company’s stocks from the U.S. stock exchange is a simple and most flexible way of investing in Google. The shares you buy get deposited into your DEMAT account and you can sell them later as per your choice. On the other hand, you can also invest in U.S. ETFs, which are the basket of diversified stocks similar to mutual funds. However, like shares, these units can be bought and sold at any time from the exchanges. Some of the U.S. ETFs with a weightage of more than 10% in Google stocks are iShares Global Comm Services ETF, Vanguard Communication Services ETF, Fidelity MSCI Communication Services ETFs, etc.
If you are looking to buy Google shares or the U.S. ETFs, then you can consider opening a Stockal account that allows you to flexibly invest at low cost. Alternatively, you can also invest in Indian mutual funds with foreign exposure, allocating some portion to Google shares. This is an indirect way to invest and does not demand opening any account but at the same time, it can cost more due to the high expense ratio.
But if you are investing directly in the Google stocks from India, you must know that there are two types of stocks listed on the U.S. stock exchanges that belong to Alphabet (Google). They are GOOGL and GOOG. Let’s find out how different they are from one another.
Difference between GOOGL and GOOG
Google has two classes of shares that are traded publicly, and they are given unique ticker names – GOOGL and GOOG. Both these stocks trade in a similar price range but their inherent nature or class is different. GOOGL shares belong to the Class A category, whereas GOOG shares belong to the Class C type.
The shareholders of GOOGL (Class A) stocks get ownership and voting rights. On the other hand, the shareholders of GOOG (Class C) stocks only get ownership in the company but no voting rights. If there are Class A and Class C shares, you must be wondering, where are Class B Google shares? Well, there are Class B shares of Google, but they are not publicly traded. Founders and other key insiders hold Class B shares, and they have higher voting rights of 10 votes per stock.
Since the Class A shares of Google have voting rights, the shares price trades with a bit of premium over the price of GOOG, which are the Class C shares without voting rights.
So which stock should you invest in? Well, before you decide to invest in either class of the stock or any stock for that matter, you must thoroughly analyze the fundamentals as well as the technicals. Let’s take a look at an in-depth fundamental and technical analysis of Google stock.
Fundamental Analysis – Investment in Google
To begin with, let’s take a look at the most recent quarter result declared by the company, which is Q4 of 2021. The growth of revenue for the final quarter of 2021 was 32.39%. Google’s growth was higher than the industry’s growth rate of 27.84%. Their net income increased by 35.56% for the same quarter. Talking about the P/E ratio, with the price of $2,556.43, the price to earnings ratio was recorded at 23.51 times as of March 2022. The PEG ratio of Google is 0.25. Since the PEG ratio is below 1, the price of Google is considered fair or undervalued.
Here are the Balance Sheet, Income Statement, and the Statement of Cash Flows of Alphabet (Google) from FY 2018 to FY 2021.
As displayed in the above table, the revenue of Alphabet for the financial year ended 31st Dec 2021 rose to $257.64 billion, 41% higher than the FY 2020. The company’s net income went up to $76.03 billion, which is 89% higher compared to the previous financial year. The rise in revenue was contributed by an increment in the revenues of all the segments.
Also, as you can see in the above table, there is a consistent rise in the total revenue, gross profit, operating income, and net income of Google. The four years from 2018 to 2021 indicate that Google is proceeding further on a rising trajectory.
Technical Analysis – Investment in Google
Fundamentally, Google seems to be in an exceptionally strong financial position. Let us also look at how Google stocks are doing technically. As the global stock markets are volatile and corrections in the broader indices occur due to geopolitical tensions between Russia and Ukraine – along with all the S&P 500 and Nasdaq stocks -Google stocks are also trading under pressure. Though technicals like MACD, moving averages, and RSI are giving sell signals on the daily timeframe, the stocks are still very strong on the monthly time frame.
Once the tensions ease and markets start to sync with the economic factors, fundamentally strong shares like Google might bounce back quickly. Momentum and trend oscillators on the monthly charts of Google are reflecting buy signals.
Let us also look at how the stocks of Google have performed in the recent past and what is the current market price of both GOOGL and GOOG stocks.
Stock Performance and Current Market Price
As of 7th March 2022, the current market price of GOOGL is $2,562.43, and that of GOOG is $2,560.05. The stock prices and performance of both the listed shares of Google are very similar. The returns in the past year have been about 27%.
The 52-week high of GOOGL is $3,030.93, and the 52-week low is $1,997.88. On the other hand, the 52-week high of GOOG is $3,042, and the 52-week low is $2,010.73. The annual fluctuation in Google stocks has been about 25%. Possible reasons could be induced by rising inflation, pandemic, and geopolitical tensions. However, compared to the other stocks in Nasdaq, the stocks of Google have performed very well.
To sum it up
Google, one of the FAANG stocks, has been a preferred choice for global investors. If you plan to invest in the U.S. stock market, then investing in Google shares can be on your list. As the price corrects, fundamentally strong shares like Google can be accumulated. Although the stock price of Google is in the range of $2,500 currently, which comes to around Rs.1,90,000 in rupee terms with Rs. 76 per USD as exchange rate. But don’t worry! Stockal has got you covered. With fractional investing, you can invest in Google shares with as low as $1 and enjoy the advantage of being a shareholder in one of the FAANG stocks. Moreover, you also get world class research with the company’s financials and opportunity to invest in predefined portfolios managed by industry experts. Excited to open an account?
To learn more, you can visit Stockal’s website here.