Raymond James Financial, Inc. (NYSE:RJF) is a favorite amongst institutional investors who own 78%

By
Simply Wall St
Published
April 19, 2022
NYSE:RJF
Source: Shutterstock

To get a sense of who is truly in control of Raymond James Financial, Inc. (NYSE:RJF), it is important to understand the ownership structure of the business. The group holding the most number of shares in the company, around 78% to be precise, is institutions. That is, the group stands to benefit the most if the stock rises (or lose the most if there is a downturn).

Because institutional owners have a huge pool of resources and liquidity, their investing decisions tend to carry a great deal 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 Raymond James Financial.

See our latest analysis for Raymond James Financial

ownership-breakdown
NYSE:RJF Ownership Breakdown April 19th 2022

What Does The Institutional Ownership Tell Us About Raymond James 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.

We can see that Raymond James Financial 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 Raymond James Financial's earnings history below. Of course, the future is what really matters.

earnings-and-revenue-growth
NYSE:RJF Earnings and Revenue Growth April 19th 2022

Investors should note that institutions actually own more than half the company, so they can collectively wield significant power. Raymond James Financial is not owned by hedge funds. Looking at our data, we can see that the largest shareholder is The Vanguard Group, Inc. with 10% of shares outstanding. Meanwhile, the second and third largest shareholders, hold 9.6% and 8.8%, of the shares outstanding, respectively.

After doing some more digging, we found that the top 12 have the combined ownership of 51% in the company, suggesting that no single shareholder has significant control over the company.

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 Raymond James 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. The company management answer to the board and the latter should represent the interests of shareholders. Notably, sometimes top-level managers are on the board themselves.

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 a reasonable proportion of Raymond James Financial, Inc.. It is very interesting to see that insiders have a meaningful US$2.4b stake in this US$23b business. Most would say this shows a good degree of alignment with shareholders, especially in a company of this size. You can click here to see if those insiders have been buying or selling.

General Public Ownership

With a 12% ownership, the general public, mostly comprising of individual investors, have some degree of sway over Raymond James Financial. 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:

It's always worth thinking about the different groups who own shares in a company. But to understand Raymond James Financial better, we need to consider many other factors. Be aware that Raymond James Financial is showing 1 warning sign in our investment analysis , 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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