How to Invest in Nationwide

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 such as Apple (AAPL +0.38%) or Walmart (WMT -0.26%).

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 services related to Nationwide
• Investing in the insurance industry via exchange-traded funds (ETFs)

When will Nationwide IPO?

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. However, 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 buy Nationwide stock

Although you can't buy shares of Nationwide, there are different companies whose stock prices 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's performance, providing indirect exposure to the company:

Follow this step-by-step guide to buy stock in companies similar to Nationwide.

1. Open your brokerage app: Log in to your brokerage account where you handle your investments.
2. Search for the stock: Enter the ticker (ALL, GWRE, or LMND) or company name into the search bar to bring up the stock's trading page.
3. Decide how many shares to buy: Consider your investment goals and how much of your portfolio you want to allocate to this stock.
4. Select order type: Choose between a market order to buy at the current price or a limit order to specify the maximum price you're willing to pay.
5. Submit your order: Confirm the details and submit your buy order.
6. Review your purchase: Check your portfolio to ensure your order was filled as expected and adjust your investment strategy accordingly.

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 -0.92%) 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, such as 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 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

Interest rates heavily influence insurance companies' financial performance. 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 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:

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