Could The Consolidated Edison, Inc. (NYSE:ED) Ownership Structure Tell Us Something Useful?

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Simply Wall St

Thu, Jan 27, 2022, 3:20 AM

The big shareholder groups in Consolidated Edison, Inc. (NYSE:ED) have power over the company. Institutions often own shares in more established companies, while it's not unusual to see insiders own a fair bit of smaller companies. Companies that have been privatized tend to have low insider ownership.

Consolidated Edison is a pretty big company. It has a market capitalization of US$29b. Normally institutions would own a significant portion of a company this size. In the chart below, we can see that institutional investors have bought into the company. Let's take a closer look to see what the different types of shareholders can tell us about Consolidated Edison.

View our latest analysis for Consolidated Edison

ownership-breakdown — NYSE:ED Ownership Breakdown January 27th 2022

What Does The Institutional Ownership Tell Us About Consolidated Edison?

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.

Consolidated Edison 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 Consolidated Edison's earnings history below. Of course, the future is what really matters.

earnings-and-revenue-growth — NYSE:ED Earnings and Revenue Growth January 27th 2022

Institutional investors own over 50% of the company, so together than can probably strongly influence board decisions. Consolidated Edison is not owned by hedge funds. BlackRock, Inc. is currently the largest shareholder, with 11% of shares outstanding. The Vanguard Group, Inc. is the second largest shareholder owning 9.1% of common stock, and State Street Global Advisors, Inc. holds about 7.6% of the company stock.

A deeper look at our ownership data shows that the top 25 shareholders collectively hold less than half of the register, suggesting a large group of small holders where no single shareholder has a majority.

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 Consolidated Edison

The definition of company insiders can be subjective and does vary between jurisdictions. Our data reflects individual insiders, capturing board members at the very least. Company management run the business, but the CEO will answer to the board, even if he or she is a member of it.

Insider ownership is positive when it signals leadership are thinking like the true owners of the company. However, high insider ownership can also give immense power to a small group within the company. This can be negative in some circumstances.

Our most recent data indicates that insiders own less than 1% of Consolidated Edison, Inc.. Being so large, we would not expect insiders to own a large proportion of the stock. Collectively, they own US$21m 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, who are usually individual investors, hold a 36% stake in Consolidated Edison. While this group can't necessarily call the shots, it can certainly have a real influence on how the company is run.

Next Steps:

While it is well worth considering the different groups that own a company, there are other factors that are even more important. Like risks, for instance. Every company has them, and we've spotted 5 warning signs for Consolidated Edison (of which 1 shouldn't be ignored!) you should know about.

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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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.