Are Institutions Heavily Invested In DuPont de Nemours, Inc.'s (NYSE:DD) Shares?

By
Simply Wall St
Published
May 10, 2022
NYSE:DD
Source: Shutterstock

A look at the shareholders of DuPont de Nemours, Inc. (NYSE:DD) can tell us which group is most powerful. Insiders often own a large chunk of younger, smaller, companies while huge companies tend to have institutions as shareholders. Companies that have been privatized tend to have low insider ownership.

DuPont de Nemours is a pretty big company. It has a market capitalization of US$33b. Normally institutions would own a significant portion of a company this size. Our analysis of the ownership of the company, below, shows that institutions are noticeable on the share registry. Let's delve deeper into each type of owner, to discover more about DuPont de Nemours.

View our latest analysis for DuPont de Nemours

ownership-breakdown
NYSE:DD Ownership Breakdown May 10th 2022

What Does The Institutional Ownership Tell Us About DuPont de Nemours?

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.

DuPont de Nemours 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 DuPont de Nemours' earnings history below. Of course, the future is what really matters.

earnings-and-revenue-growth
NYSE:DD Earnings and Revenue Growth May 10th 2022

Institutional investors own over 50% of the company, so together than can probably strongly influence board decisions. DuPont de Nemours is not owned by hedge funds. The company's largest shareholder is The Vanguard Group, Inc., with ownership of 8.4%. Meanwhile, the second and third largest shareholders, hold 7.1% and 5.3%, of the shares outstanding, respectively.

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. Quite a few analysts cover the stock, so you could look into forecast growth quite easily.

Insider Ownership Of DuPont de Nemours

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 data suggests that insiders own under 1% of DuPont de Nemours, Inc. in their own names. Being so large, we would not expect insiders to own a large proportion of the stock. Collectively, they own US$35m of stock. Arguably recent buying and selling is just as important to consider. You can click here to see if insiders have been buying or selling.

General Public Ownership

With a 25% ownership, the general public, mostly comprising of individual investors, have some degree of sway over DuPont de Nemours. 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 DuPont de Nemours better, we need to consider many other factors. Take risks for example - DuPont de Nemours has 2 warning signs we think you should be aware of.

But ultimately it is the future, not the past, that will determine how well the owners of this business will do. Therefore we think it advisable to take a look at this free report showing whether analysts are predicting a brighter 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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