The big shareholder groups in Manulife Financial Corporation (TSE:MFC) have power over the company. Institutions will often hold stock in bigger companies, and we expect to see insiders owning a noticeable percentage of the smaller ones. Companies that have been privatized tend to have low insider ownership.
With a market capitalization of CA$46b, Manulife Financial is rather large. We’d expect to see institutional investors on the register. Companies of this size are usually well known to retail investors, too. Taking a look at our data on the ownership groups (below), it seems that institutions own shares in the company. Let’s take a closer look to see what the different types of shareholders can tell us about Manulife Financial.
See our latest analysis for Manulife Financial
TSX:MFC Ownership Breakdown July 20th 2021
What Does The Institutional Ownership Tell Us About Manulife Financial?
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.
Manulife Financial already has institutions on the share registry. Indeed, they own a respectable stake in the company. 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 Manulife Financial’s earnings history below. Of course, the future is what really matters.
TSX:MFC Earnings and Revenue Growth July 20th 2021
Since institutional investors own more than half the issued stock, the board will likely have to pay attention to their preferences. Manulife Financial is not owned by hedge funds. BMO Global Asset Management is currently the largest shareholder, with 4.1% of shares outstanding. In comparison, the second and third largest shareholders hold about 3.1% and 3.0% of the stock.
On studying our ownership data, we found that 25 of the top shareholders collectively own less than 50% of the share register, implying that no single individual has a majority interest.
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 Manulife Financial
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 Manulife Financial Corporation. Being so large, we would not expect insiders to own a large proportion of the stock. Collectively, they own CA$24m 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
With a 45% ownership, the general public have some degree of sway over Manulife Financial. While this group can’t necessarily call the shots, it can certainly have a real influence on how the company is run.
Next Steps:
It’s always worth thinking about the different groups who own shares in a company. But to understand Manulife Financial better, we need to consider many other factors. Case in point: We’ve spotted 3 warning signs for Manulife Financial you should be aware of, and 1 of them doesn’t sit too well with us.
If you are like me, you may want to think about whether this company will grow or shrink. Luckily, you can check this free report showing analyst forecasts for its future.
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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