New Zealand markets closed
  • NZX 50

    11,382.56
    +60.85 (+0.54%)
     
  • NZD/USD

    0.6252
    -0.0011 (-0.18%)
     
  • NZD/EUR

    0.6006
    -0.0003 (-0.06%)
     
  • ALL ORDS

    7,447.60
    +15.40 (+0.21%)
     
  • ASX 200

    7,259.50
    +17.70 (+0.24%)
     
  • OIL

    76.28
    -1.66 (-2.13%)
     
  • GOLD

    1,754.00
    +8.40 (+0.48%)
     
  • NASDAQ

    11,756.03
    -82.68 (-0.70%)
     
  • FTSE

    7,486.67
    +20.07 (+0.27%)
     
  • Dow Jones

    34,347.03
    +152.97 (+0.45%)
     
  • DAX

    14,541.38
    +1.82 (+0.01%)
     
  • Hang Seng

    17,573.58
    -87.32 (-0.49%)
     
  • NIKKEI 225

    28,283.03
    -100.06 (-0.35%)
     
  • NZD/JPY

    86.9410
    +0.2080 (+0.24%)
     

With 65% ownership, The Procter & Gamble Company (NYSE:PG) boasts of strong institutional backing

Every investor in The Procter & Gamble Company (NYSE:PG) should be aware of the most powerful shareholder groups. The group holding the most number of shares in the company, around 65% to be precise, is institutions. In other words, the group stands to gain the most (or lose the most) from their investment into the company.

Given the vast amount of money and research capacities at their disposal, institutional ownership tends to carry a lot of weight, especially with individual investors. Hence, having a considerable amount of institutional money invested in a company is often regarded as a desirable trait.

In the chart below, we zoom in on the different ownership groups of Procter & Gamble.

View our latest analysis for Procter & Gamble

ownership-breakdown
ownership-breakdown

What Does The Institutional Ownership Tell Us About Procter & Gamble?

Many institutions measure their performance against an index that approximates the local market. So they usually pay more attention to companies that are included in major indices.

Procter & Gamble already has institutions on the share registry. Indeed, they own a respectable stake in the company. This suggests some credibility amongst professional investors. But we can't rely on that fact alone since institutions make bad investments sometimes, just like everyone does. If multiple institutions change their view on a stock at the same time, you could see the share price drop fast. It's therefore worth looking at Procter & Gamble's earnings history below. Of course, the future is what really matters.

earnings-and-revenue-growth
earnings-and-revenue-growth

Institutional investors own over 50% of the company, so together than can probably strongly influence board decisions. Hedge funds don't have many shares in Procter & Gamble. The company's largest shareholder is The Vanguard Group, Inc., with ownership of 9.3%. Meanwhile, the second and third largest shareholders, hold 6.8% and 4.4%, of the shares outstanding, respectively.

Our studies suggest that the top 25 shareholders collectively control less than half of the company's shares, meaning that the company's shares are widely disseminated and there is no dominant shareholder.

Researching institutional ownership is a good way to gauge and filter a stock's expected performance. The same can be achieved by studying analyst sentiments. Quite a few analysts cover the stock, so you could look into forecast growth quite easily.

Insider Ownership Of Procter & Gamble

The definition of an insider can differ slightly between different countries, but members of the board of directors always count. Management ultimately answers to the board. However, it is not uncommon for managers to be executive board members, especially if they are a founder or the CEO.

I generally consider insider ownership to be a good thing. However, on some occasions it makes it more difficult for other shareholders to hold the board accountable for decisions.

Our data suggests that insiders own under 1% of The Procter & Gamble Company in their own names. Being so large, we would not expect insiders to own a large proportion of the stock. Collectively, they own US$213m of stock. In this sort of situation, it can be more interesting to see if those insiders have been buying or selling.

General Public Ownership

The general public-- including retail investors -- own 35% stake in the company, and hence can't easily be ignored. While this size of ownership may not be enough to sway a policy decision in their favour, they can still make a collective impact on company policies.

Next Steps:

While it is well worth considering the different groups that own a company, there are other factors that are even more important. Take risks for example - Procter & Gamble has 2 warning signs we think you should be aware of.

If you would prefer discover what analysts are predicting in terms of future growth, do not miss this free report on analyst forecasts.

NB: Figures in this article are calculated using data from the last twelve months, which refer to the 12-month period ending on the last date of the month the financial statement is dated. This may not be consistent with full year annual report figures.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.

This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

Join A Paid User Research Session
You’ll receive a US$30 Amazon Gift card for 1 hour of your time while helping us build better investing tools for the individual investors like yourself. Sign up here