With 65% ownership, Exxon Mobil Corporation (NYSE:XOM) boasts of strong institutional backing
In This Article:
Key Insights
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Institutions' substantial holdings in Exxon Mobil implies that they have significant influence over the company's share price
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A total of 25 investors have a majority stake in the company with 44% ownership
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Ownership research along with analyst forecasts data help provide a good understanding of opportunities in a stock
To get a sense of who is truly in control of Exxon Mobil Corporation (NYSE:XOM), it is important to understand the ownership structure of the business. The group holding the most number of shares in the company, around 65% to be precise, is institutions. In other words, the group stands to gain the most (or lose the most) from their investment into the company.
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 delve deeper into each type of owner of Exxon Mobil, beginning with the chart below.
Check out our latest analysis for Exxon Mobil
What Does The Institutional Ownership Tell Us About Exxon Mobil?
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 Exxon Mobil 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 Exxon Mobil's historic earnings and revenue below, but keep in mind there's always more to the story.
Investors should note that institutions actually own more than half the company, so they can collectively wield significant power. Exxon Mobil is not owned by hedge funds. Our data shows that The Vanguard Group, Inc. is the largest shareholder with 9.9% of shares outstanding. With 6.9% and 5.0% of the shares outstanding respectively, BlackRock, Inc. and State Street Global Advisors, Inc. are the second and third largest shareholders.
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.