Could The EPR Properties (NYSE:EPR) Ownership Structure Tell Us Something Useful?

By
Simply Wall St
Published
January 27, 2021
NYSE:EPR

Every investor in EPR Properties (NYSE:EPR) should be aware of the most powerful shareholder groups. Institutions often own shares in more established companies, while it's not unusual to see insiders own a fair bit of smaller companies. We also tend to see lower insider ownership in companies that were previously publicly owned.

EPR Properties has a market capitalization of US$3.0b, so we would expect some institutional investors to have noticed the stock. In the chart below, we can see that institutions are noticeable on the share registry. We can zoom in on the different ownership groups, to learn more about EPR Properties.

See our latest analysis for EPR Properties

ownership-breakdown
NYSE:EPR Ownership Breakdown January 27th 2021

What Does The Institutional Ownership Tell Us About EPR Properties?

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 EPR Properties does have institutional investors; and they hold a good portion of the company's stock. This suggests some credibility amongst professional investors. But we can't rely on that fact alone since institutions make bad investments sometimes, just like everyone does. 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 EPR Properties' historic earnings and revenue below, but keep in mind there's always more to the story.

earnings-and-revenue-growth
NYSE:EPR Earnings and Revenue Growth January 27th 2021

Institutional investors own over 50% of the company, so together than can probably strongly influence board decisions. It looks like hedge funds own 8.3% of EPR Properties shares. That catches my attention because hedge funds sometimes try to influence management, or bring about changes that will create near term value for shareholders. The company's largest shareholder is BlackRock, Inc., with ownership of 16%. Meanwhile, the second and third largest shareholders, hold 14% and 8.3%, of the shares outstanding, respectively. In addition, we found that Gregory Silvers, the CEO has 0.6% of the shares allocated to their name.

We did some more digging and found that 6 of the top shareholders account for roughly 52% of the register, implying that along with larger shareholders, there are a few smaller shareholders, thereby balancing out each others interests somewhat.

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 is some analyst coverage of the stock, but it could still become more well known, with time.

Insider Ownership Of EPR Properties

The definition of an insider can differ slightly between different countries, but members of the board of directors always count. Company management run the business, but the CEO will answer to the board, even if he or she is a member of it.

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.

Shareholders would probably be interested to learn that insiders own shares in EPR Properties. It is a pretty big company, so it is generally a positive to see some potentially meaningful alignment. In this case, they own around US$35m worth of shares (at current prices). If you would like to explore the question of insider alignment, you can click here to see if insiders have been buying or selling.

General Public Ownership

With a 13% ownership, the general public have some degree of sway over EPR Properties. While this size of ownership may not be enough to sway a policy decision in their favour, they can still make a collective impact on company policies.

Next Steps:

It's always worth thinking about the different groups who own shares in a company. But to understand EPR Properties better, we need to consider many other factors. Case in point: We've spotted 3 warning signs for EPR Properties you should be aware of, and 1 of them makes us a bit uncomfortable.

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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This article by Simply Wall St is general in nature. 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.
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