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    Home»Utilities»United Utilities Group PLC (LON:UU.) is favoured by institutional owners who hold 81% of the company
    Utilities

    United Utilities Group PLC (LON:UU.) is favoured by institutional owners who hold 81% of the company

    October 14, 20245 Mins Read


    Key Insights

    • Significantly high institutional ownership implies United Utilities Group’s stock price is sensitive to their trading actions
    • 51% of the business is held by the top 14 shareholders
    • Recent sales by insiders

    A look at the shareholders of United Utilities Group PLC (LON:UU.) can tell us which group is most powerful. With 81% stake, institutions possess the maximum shares in the company. 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. Therefore, a good portion of institutional money invested in the company is usually a huge vote of confidence on its future.

    Let’s take a closer look to see what the different types of shareholders can tell us about United Utilities Group.

    See our latest analysis for United Utilities Group

    ownership-breakdown
    LSE:UU. Ownership Breakdown October 14th 2024

    What Does The Institutional Ownership Tell Us About United Utilities Group?

    Institutional investors commonly compare their own returns to the returns of a commonly followed index. So they generally do consider buying larger companies that are included in the relevant benchmark index.

    We can see that United Utilities Group does have institutional investors; and they hold a good portion of the company’s stock. This can indicate that the company has a certain degree of credibility in the investment community. However, it is best to be wary of relying on the supposed validation that comes with institutional investors. They too, get it wrong sometimes. 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 United Utilities Group’s earnings history below. Of course, the future is what really matters.

    earnings-and-revenue-growth
    LSE:UU. Earnings and Revenue Growth October 14th 2024

    Since institutional investors own more than half the issued stock, the board will likely have to pay attention to their preferences. We note that hedge funds don’t have a meaningful investment in United Utilities Group. The company’s largest shareholder is BlackRock, Inc., with ownership of 11%. Meanwhile, the second and third largest shareholders, hold 8.8% and 5.1%, of the shares outstanding, respectively.

    Looking at the shareholder registry, we can see that 51% of the ownership is controlled by the top 14 shareholders, meaning that no single shareholder has a majority interest in the ownership.

    While it makes sense to study institutional ownership data for a company, it also makes sense to study analyst sentiments to know which way the wind is blowing. There are a reasonable number of analysts covering the stock, so it might be useful to find out their aggregate view on the future.

    Insider Ownership Of United Utilities Group

    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 most recent data indicates that insiders own less than 1% of United Utilities Group PLC. As it is a large company, we’d only expect insiders to own a small percentage of it. But it’s worth noting that they own UK£2.1m worth of shares. It is good to see board members owning shares, but it might be worth checking if those insiders have been buying.

    General Public Ownership

    The general public– including retail investors — own 18% stake in the company, and hence can’t easily be ignored. This size of ownership, while considerable, may not be enough to change company policy if the decision is not in sync with other large shareholders.

    Next Steps:

    I find it very interesting to look at who exactly owns a company. But to truly gain insight, we need to consider other information, too. For instance, we’ve identified 3 warning signs for United Utilities Group (2 are potentially serious) that 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.

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    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.



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