While institutions own 44% of Origin Energy Limited (ASX:ORG), retail investors are its largest shareholders with 54% ownership

Key Insights

• Origin Energy's significant retail investors ownership suggests that the key decisions are influenced by shareholders from the larger public
• A total of 25 investors have a majority stake in the company with 43% ownership
• Recent sales by insiders

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To get a sense of who is truly in control of Origin Energy Limited (ASX:ORG), it is important to understand the ownership structure of the business. We can see that retail investors own the lion's share in the company with 54% ownership. That is, the group stands to benefit the most if the stock rises (or lose the most if there is a downturn).

Institutions, on the other hand, account for 44% of the company's stockholders. Insiders often own a large chunk of younger, smaller, companies while huge companies tend to have institutions as shareholders.

Let's take a closer look to see what the different types of shareholders can tell us about Origin Energy.

View our latest analysis for Origin Energy

What Does The Institutional Ownership Tell Us About Origin Energy?

Institutions typically measure themselves against a benchmark when reporting to their own investors, so they often become more enthusiastic about a stock once it's included in a major index. We would expect most companies to have some institutions on the register, especially if they are growing.

We can see that Origin Energy does have institutional investors; and they hold a good portion of the company's stock. This implies the analysts working for those institutions have looked at the stock and they like it. But just like anyone else, they could be wrong. It is not uncommon to see a big share price drop if two large institutional investors try to sell out of a stock at the same time. So it is worth checking the past earnings trajectory of Origin Energy, (below). Of course, keep in mind that there are other factors to consider, too.

Hedge funds don't have many shares in Origin Energy. Looking at our data, we can see that the largest shareholder is Australian Super Pty Ltd with 17% of shares outstanding. State Street Global Advisors, Inc. is the second largest shareholder owning 6.1% of common stock, and The Vanguard Group, Inc. holds about 6.0% of the company stock.

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.

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 plenty of analysts covering the stock, so it might be worth seeing what they are forecasting, too.

Insider Ownership Of Origin Energy

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. 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.

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 data suggests that insiders own under 1% of Origin Energy Limited in their own names. 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 AU$51m 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, mostly comprising of individual investors, collectively holds 54% of Origin Energy shares. This level of ownership gives investors from the wider public some power to sway key policy decisions such as board composition, executive compensation, and the dividend payout ratio.

Next Steps:

While it is well worth considering the different groups that own a company, there are other factors that are even more important. Consider for instance, the ever-present spectre of investment risk. We've identified 3 warning signs with Origin Energy (at least 1 which is a bit unpleasant) , and understanding them should be part of your investment process.

Ultimately the future is most important. You can access this free report on analyst forecasts for the company.

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.