Stock Analysis

Is Omega Healthcare Investors, Inc. (NYSE:OHI) Popular Amongst Institutions?

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NYSE:OHI
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If you want to know who really controls Omega Healthcare Investors, Inc. (NYSE:OHI), then you'll have to look at the makeup of its share registry. Institutions often own shares in more established companies, while it's not unusual to see insiders own a fair bit of smaller companies. Companies that used to be publicly owned tend to have lower insider ownership.

With a market capitalization of US$8.4b, Omega Healthcare Investors is rather large. We'd expect to see institutional investors on the register. Companies of this size are usually well known to retail investors, too. In the chart below, we can see that institutional investors have bought into the company. Let's delve deeper into each type of owner, to discover more about Omega Healthcare Investors.

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ownership-breakdown
NYSE:OHI Ownership Breakdown November 30th 2020

What Does The Institutional Ownership Tell Us About Omega Healthcare Investors?

Many institutions measure their performance against an index that approximates the local market. So they usually pay more attention to companies that are included in major indices.

Omega Healthcare Investors already has institutions on the share registry. Indeed, they own a respectable stake in the company. 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. 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 Omega Healthcare Investors, (below). Of course, keep in mind that there are other factors to consider, too.

earnings-and-revenue-growth
NYSE:OHI Earnings and Revenue Growth November 30th 2020

Institutional investors own over 50% of the company, so together than can probably strongly influence board decisions. We note that hedge funds don't have a meaningful investment in Omega Healthcare Investors. Looking at our data, we can see that the largest shareholder is The Vanguard Group, Inc. with 14% of shares outstanding. BlackRock, Inc. is the second largest shareholder owning 12% of common stock, and State Street Global Advisors, Inc. holds about 5.2% of the company stock.

After doing some more digging, we found that the top 16 have the combined ownership of 50% 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 Omega Healthcare Investors

The definition of an insider can differ slightly between different countries, but members of the board of directors always count. 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.

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 Omega Healthcare Investors, Inc. in their own names. It is a very large company, so it would be surprising to see insiders own a large proportion of the company. Though their holding amounts to less than 1%, we can see that board members collectively own US$42m worth of shares (at current prices). It is always good to see at least some insider ownership, but it might be worth checking if those insiders have been selling.

General Public Ownership

The general public holds a 27% stake in Omega Healthcare Investors. 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 Omega Healthcare Investors better, we need to consider many other factors. For example, we've discovered 5 warning signs for Omega Healthcare Investors (1 shouldn't be ignored!) that you should be aware of before investing here.

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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