Individual investors account for 51% of The Bank of Nova Scotia (TSE:BNS) ownership, while institutions account for 49%
If you want to know who really controls the Bank of Nova Scotia (TSE:BNS), then you’ll need to look at the composition of its share register. We can see that individual investors hold the lion’s share of the company with 51% ownership. In other words, the group is likely to gain the most (or lose the most) from its investment in the business.
Institutions, meanwhile, represent 49% of the company’s shareholders. Institutions often own shares in larger companies, and we expect to see insiders owning a noticeable percentage of smaller ones.
Let’s take a closer look at each type of Bank of Nova Scotia owner, starting with the table below.
Check out our latest analysis for Bank of Nova Scotia
What does institutional ownership tell us about the Bank of Nova Scotia?
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.
As you can see, institutional investors own a sizeable portion of the Bank of Nova Scotia. This suggests some credibility with professional investors. But we cannot rely solely on this fact since institutions sometimes make bad investments, like everyone else. When multiple institutions hold a stock, there is always a risk that they are in a “crowded trade”. When such a transaction goes wrong, multiple parties may compete to quickly sell shares. This risk is higher in a company with no history of growth. You can see Bank of Nova Scotia’s historic earnings and revenue below, but keep in mind there’s always more to the story.
Hedge funds don’t have a lot of shares in the Bank of Nova Scotia. BMO Asset Management Corp. is currently the largest shareholder of the company with 4.5% of the outstanding shares. With 4.1% and 3.4% of shares outstanding, respectively, Royal Bank of Canada, Investment Banking and Securities and The Vanguard Group, 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, which means that the company’s shares are widely distributed and there is no dominant shareholder.
While it makes sense to study data on a company’s institutional ownership, it also makes sense to study analyst sentiment to find out which way the wind is blowing. A number of analysts cover the stock, so you can look at growth forecasts quite easily.
Owned by a Bank of Nova Scotia insider
The definition of an insider may differ slightly from country to country, but board members still matter. The management of the company answers to the board of directors and the latter must represent the interests of the shareholders. In particular, sometimes the senior executives themselves sit on the board of directors.
I generally consider insider ownership to be a good thing. However, there are times when it is more difficult for other shareholders to hold the board accountable for decisions.
Our information suggests that insiders of The Bank of Nova Scotia own less than 1% of the company. As this is a large company, we expect insiders to own only a small percentage. But it should be noted that they hold C$26 million worth of stock. In this kind of situation, it may be more interesting to see whether these insiders have been buying or selling.
General public property
The general public, including retail investors, owns 51% of the Bank of Nova Scotia. This level of ownership gives mainstream investors some power to influence key policy decisions such as board composition, executive compensation, and dividend payout ratio.
It is always useful to think about the different groups that own shares in a company. But to better understand the Bank of Nova Scotia, we need to consider many other factors.
I like to dive deeper on the performance of a company in the past. You can access this interactive chart past earnings, income and cash flow, for free.
But finally it’s the future, not the past, that will determine the success of the owners of this business. Therefore, we think it’s advisable to take a look at this free report showing whether analysts are predicting a brighter future.
NB: The figures in this article are calculated using trailing twelve month data, which refers to the 12 month period ending on the last day of the month in which the financial statements are dated. This may not be consistent with the annual report figures for the full year.
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This Simply Wall St article is general in nature. We provide commentary based on historical data and analyst forecasts only using unbiased methodology and our articles are not intended to be financial advice. It is not a recommendation to buy or sell stocks and does not take into account your objectives or financial situation. Our goal is to bring you targeted long-term analysis based on fundamental data. Note that our analysis may not take into account the latest announcements from price-sensitive companies or qualitative materials. Simply Wall St has no position in the stocks mentioned.