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The MDU Resources Group Inc (NYSE:MDU) Ownership Structure Could Be Important

Gabriel Boyd

The big shareholder groups in MDU Resources Group Inc (NYSE:MDU) have power over the company. Large companies usually have institutions as shareholders, and we usually see insiders owning shares in smaller companies. Companies that have been privatized tend to have low insider ownership.

MDU Resources Group has a market capitalization of US$5.53b, so it’s too big to fly under the radar. We’d expect to see both institutions and retail investors owning a portion of the company. Taking a look at the our data on the ownership groups (below), it’s seems that institutions own shares in the company. We can zoom in on the different ownership groups, to learn more about MDU.

View our latest analysis for MDU Resources Group

NYSE:MDU Ownership Summary August 30th 18

What Does The Institutional Ownership Tell Us About MDU Resources Group?

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.

As you can see, institutional investors own 65.6% of MDU Resources Group. 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 MDU Resources Group, (below). Of course, keep in mind that there are other factors to consider, too.

NYSE:MDU Income Statement Export August 30th 18

Investors should note that institutions actually own more than half the company, so they can collectively wield significant power. MDU Resources Group is not owned by hedge funds. There is some analyst coverage of the stock, but it could still become more well known, with time.

Insider Ownership Of MDU Resources Group

While the precise definition of an insider can be subjective, almost everyone considers board members to be insiders. 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.

Insider ownership is positive when it signals leadership are thinking like the true owners of the company. However, high insider ownership can also give immense power to a small group within the company. This can be negative in some circumstances. Shareholders would probably be interested to learn that insiders own shares in MDU Resources Group Inc. This is a big company, so it is good to see this level of alignment. Insiders own US$57.5m worth of shares (at current prices). It is good to see this level of investment by insiders. You can check here to see if those insiders have been buying recently.

General Public Ownership

The general public holds a 33.3% stake in MDU. While this group can’t necessarily call the shots, it can certainly have a real influence on how the company is run.



Next Steps:

I find it very interesting to look at who exactly owns a company. But to truly gain insight, we need to consider other information, too.

I like to dive deeper into how a company has performed in the past. You can access this interactive graph of past earnings, revenue and cash flow, for free .

Ultimately the future is most important. You can access this free report on analyst forecasts for the company.

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.

To help readers see past the short term volatility of the financial market, we aim to bring you a long-term focused research analysis purely driven by fundamental data. Note that our analysis does not factor in the latest price-sensitive company announcements.

The author is an independent contributor and at the time of publication had no position in the stocks mentioned. For errors that warrant correction please contact the editor at editorial-team@simplywallst.com.