Nationwide is known for providing insurance and producing infamous commercials featuring various professional athletes. Nationwide provides a wide range of insurance products, including auto, home, life, pet, farm, and commercial insurance.
Is it publicly traded?
Is Nationwide publicly traded?
Nationwide is not publicly traded on the stock market. This means you cannot directly buy shares of Nationwide as you would with a publicly traded company like Apple (AAPL 0.67%) or Walmart (WMT 0.72%). Nationwide operates as a mutual company, which means it is owned by its policyholders rather than shareholders. With Nationwide and other mutual companies, policyholders benefit from profits through dividends or reduced premiums.
Although Nationwide is not publicly traded, there are several ways investors can gain indirect exposure to its success, including:
- Investing in companies with a similar profile to Nationwide.
- Investing in companies that provide related services to Nationwide.
- Investing in the insurance industry via exchange-traded funds (ETFs).
When will it IPO?
When will Nationwide IPO?
As of now, Nationwide has not announced any plans to go public. An initial public offering (IPO) would involve Nationwide selling shares to the public and being listed on a stock exchange, but there has been no indication from the company that it intends to pursue this path in the near future. It's difficult for a mutual company to change its structure.
How to invest
How to buy Nationwide stock
Although Nationwide is not available for direct stock purchase, there are different companies whose stock price might rise when Nationwide performs well because they are in the same industry or their business provides products or services to the insurance industry.
Here are three companies that have ties to Nationwide, providing indirect exposure to the company:
Allstate
Since you can't buy Nationwide stock, the simplest alternative would be to invest in one of Nationwide's main competitors, like Allstate (ALL -2.89%). As one of the largest publicly traded insurance companies in the U.S., Allstate boasts a diverse portfolio of insurance products and a robust financial track record. You could also gain exposure to Allstate through mutual funds and ETFs.
Guidewire Software
Guidewire Software (GWRE -1.08%) is a leading provider of software solutions tailored for the property and casualty (P&C) insurance industry. Its products, which include systems for underwriting, policy administration, billing, and claims management, are designed to help insurers streamline their operations, improve efficiency, and enhance customer service. Nationwide and many other major insurance companies use Guidewire's technology.
Lemonade
Lemonade (LMND 1.61%) is transforming the industry with its technology-driven approach, using artificial intelligence and machine learning to streamline processes and enhance customer experience. This innovative model allows for rapid claims processing and a highly user-friendly digital platform, attracting tech-savvy, younger consumers. By investing in Lemonade, you can gain exposure to an up-and-coming company that is changing the game for insurance practices and industry standards.
Follow this step-by-step guide to buy stock in companies similar to Nationwide.
Step 1: Open a brokerage account
The first step to investing in companies related to Nationwide is to open a brokerage account. This account will allow you to buy and sell stocks, ETFs, and other securities. Many online brokers offer easy-to-use platforms and low fees, making them accessible to most investors. Here is what to look for when searching for brokers.
- Commission-free trades: Many brokers offer commission-free trading, which can save you money on each transaction.
- Low or no minimum deposit: Many brokers have eliminated their minimum deposit requirement, making investing easier for everyone.
- User-friendly platform: Choose a brokerage with a platform that is easy to use and navigate.
- Research tools and resources: Access to educational resources, stock analysis tools, and customer support can be very helpful, especially for new investors.
Step 2: Figure out your budget
Before making any investments, it's crucial to determine how much you can afford to invest. Remember, much of this will also revolve around your experience as an investor.
Word to the wise: When starting out, stick to a strict budget. Think about your financial goals, risk tolerance, and investment horizon. This will help you decide how much money to allocate toward investments related to Nationwide.
Another factor to consider is diversification. You may want to spread your investment across several companies in the insurance business, as well as different industries altogether.
Step 3: Do research
It's essential to thoroughly research a company before buying its shares. You should learn how it makes money and study its balance sheet and other factors to ensure you have a solid grasp on whether the company can grow value for its shareholders over the long term.
Step 4: Place an order
Once you've opened your brokerage account, made a budget, and done your due diligence, it's time to place an order. But you'll still need to decide between a market order and a limit order. The Motley Fool recommends a market order since it guarantees you'll be able to buy the stock at the current price.
Should I invest?
Should I invest in Nationwide-related stocks?
Deciding whether to invest in stocks related to Nationwide depends on your personal circumstances and investment strategy.
Reasons to consider investing
Here are a few reasons you might consider investing in Nationwide-related stocks:
You believe in the resilience of the insurance industry:
If you expect steady demand for insurance products, companies like Allstate and Progressive (PGR -1.09%) can be solid long-term investments. The insurance industry is known for its stability and capacity to generate consistent returns, even in uncertain economic times.
You believe that insurers can benefit from an uptick in natural disasters:
Insurance companies can often charge higher premiums following a natural disaster. They may see higher demand for coverage and increased government regulation encouraging or requiring insurance in response to such events. However, it's important to note that the payouts from multiple natural disasters could bankrupt insurance companies.
You think the baby boomer retirement wave will have an effect:
Many insurance companies like Nationwide also provide financial products, like retirement accounts. An aging population in the U.S. could lead to more demand for these types of products.
Reasons to avoid the investment
While there are good reasons for investing in insurance companies, there are several reasons you might decide it's not right for your portfolio. These include:
You aren't interested in stocks with limited growth potential:
Traditional insurance companies like Nationwide often exhibit slower growth compared to other sectors. While they provide stability and steady returns, they may not offer the high growth potential that some investors seek. This can be less appealing to those looking for significant capital appreciation over a shorter period.
You want something that's insulated from the interest rate environment:
The financial performance of insurance companies is heavily influenced by interest rates. When interest rates are low, returns on their investment portfolios, which primarily consist of bonds and other fixed-income securities, are also low. This can reduce overall profitability and hurt stock performance.
You feel there will be a reason for high claims payouts:
In periods of increased claims, such as during natural disasters or pandemics, insurance companies can face substantial financial strain. High claims payouts can significantly affect an insurance company's financial health and reduce its profit margins, making its stocks less attractive to investors seeking stable returns.
ETFs
ETFs with exposure to Nationwide
For those looking for broader exposure to the insurance sector, there are several ETFs that include companies similar to Nationwide. Here are a few options:
| ETF Ticker | Name | Exposure to Nationwide-related companies | AUM | Expense ratio |
|---|---|---|---|---|
| (NYSEMKT:VFH) | Vanguard Financials Index Funds ETF | Broad exposure to the financial sector, including insurance companies. | $9.98 billion | 0.10% |
| (NASDAQ:KBWP) | Invesco KBW Property & Casualty Insurance ETF | Targeted exposure to property and casualty insurance companies. | $330.89 million | 0.35% |
| (NYSEMKT:FNCL) | Fidelity MSCI Financials Index ETF | Tracks the MSCI USA IMI Financials Index, covering a wide range of financial companies, including insurers. | $1.62 billion | 0.08% |
| (NASDAQ:FINX) | Global X FinTech ETF | Invests in financial technology companies affecting the insurance industry. | $296.25 million | 0.68% |
| (NYSEMKT:XLF) | SPDR S&P 500 Financials ETF | Tracks the financial sector of the S&P 500, including major insurance companies. | $38.71 billion | 0.09% |
| (NYSEMKT:IXG) | iShares Global Financials ETF | Provides exposure to global financial companies, including insurers across various regions. | $395.48 | 0.42% |
Related investing topics
The bottom line on Nationwide
Although you can't directly invest in Nationwide since it's not publicly traded, there are several ways to gain indirect exposure to its performance. By investing in related companies and ETFs, you can benefit from Nationwide's success and the broader insurance sector's stability.
FAQ
Investing in Nationwide FAQ
Does Nationwide offer investing?
Can you buy Nationwide shares?
No, you can't buy Nationwide shares directly because Nationwide is not a publicly traded company.
Is Nationwide a public company?
No, Nationwide is not a public company. It is a mutual company owned by its policyholders. This structure allows Nationwide to focus on its customers' best interests rather than maximizing shareholder value.
The Motley Fool has positions in and recommends Apple, Lemonade, and Walmart. The Motley Fool recommends Guidewire Software and Progressive. The Motley Fool has a disclosure policy.
