Public companies account for 70% of Endesa, S.A.'s (BME:ELE) ownership, while individual investors account for 20%

Key Insights

• The considerable ownership by public companies in Endesa indicates that they collectively have a greater say in management and business strategy
• Enel SpA owns 70% of the company
• Analyst forecasts along with ownership data serve to give a strong idea about prospects for a business

Every investor in Endesa, S.A. (BME:ELE) should be aware of the most powerful shareholder groups. We can see that public companies own the lion's share in the company with 70% ownership. In other words, the group stands to gain the most (or lose the most) from their investment into the company.

Meanwhile, individual investors make up 20% of the company’s shareholders.

In the chart below, we zoom in on the different ownership groups of Endesa.

Check out our latest analysis for Endesa

What Does The Institutional Ownership Tell Us About Endesa?

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 Endesa 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. When multiple institutions own a stock, there's always a risk that they are in a 'crowded trade'. When such a trade goes wrong, multiple parties may compete to sell stock fast. This risk is higher in a company without a history of growth. You can see Endesa's historic earnings and revenue below, but keep in mind there's always more to the story.

Endesa is not owned by hedge funds. Our data shows that Enel SpA is the largest shareholder with 70% of shares outstanding. This implies that they have majority interest control of the future of the company. With 1.6% and 1.4% of the shares outstanding respectively, BlackRock, Inc. and Thornburg Investment Management, Inc. are the second and third largest shareholders.

While studying institutional ownership for a company can add value to your research, it is also a good practice to research analyst recommendations to get a deeper understand of a stock's expected performance. 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 Endesa

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.

Most consider insider ownership a positive because it can indicate the board is well aligned with other shareholders. However, on some occasions too much power is concentrated within this group.

Our data cannot confirm that board members are holding shares personally. Given we are not picking up on insider ownership, we may have missing data. Therefore, it would be interesting to assess the CEO compensation and tenure, here.

General Public Ownership

With a 20% ownership, the general public, mostly comprising of individual investors, have some degree of sway over Endesa. 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.

Public Company Ownership

Public companies currently own 70% of Endesa stock. We can't be certain but it is quite possible this is a strategic stake. The businesses may be similar, or work together.

Next Steps:

While it is well worth considering the different groups that own a company, there are other factors that are even more important. Case in point: We've spotted 3 warning signs for Endesa you should be aware of.

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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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.