April 11, 2025 a 02:47 am
ERIE: Dividend Analysis - Erie Indemnity Company
Erie Indemnity Company, a distinguished name in the insurance sector, offers investors a solid dividend profile. With a reliable dividend history stretching over 31 years and absence of cuts or suspensions, Erie displays stability and consistency. Their current dividend yield is modest, but when coupled with strategic growth, it suggests a robust potential for long-term returns.
📊 Overview
Erie Indemnity Company operates within the insurance sector, presenting a dividend yield of 1.39%. Their current dividend per share stands at 5.14 USD, bolstered by an impressive 31-year history of dividend payments. Notably, there have been no recent cuts or suspensions, underscoring their reliability.
| Metric | Value |
|---|---|
| Sector | Insurance |
| Dividend yield | 1.39% |
| Current dividend per share | 5.14 USD |
| Dividend history | 31 years |
| Last cut or suspension | None |
📈 Dividend History
The company's consistent dividend payments reflect its financial health and commitment to returning value to its shareholders. This is crucial for investors seeking steady income from their investments.
| Year | Dividend per Share (USD) |
|---|---|
| 2025 | 2.73 |
| 2024 | 5.10 |
| 2023 | 4.76 |
| 2022 | 4.44 |
| 2021 | 4.14 |
📈 Dividend Growth
Monitoring dividend growth is vital for assessing the potential for future increases and protecting against inflation. Over the past years, Erie's dividend growth rates have shown a steady but moderate trend.
| Time | Growth |
|---|---|
| 3 years | 7.20% |
| 5 years | 7.21% |
The average dividend growth is 7.21% over 5 years. This shows moderate but steady dividend growth.
⚖️ Payout Ratio
The payout ratio is an essential indicator of sustainability in dividend payments. It shows how much of the company's earnings and free cash flow is returned to shareholders as dividends.
| Key figure | Ratio |
|---|---|
| EPS-based | 39.56% |
| Free cash flow-based | 81.08% |
The EPS-based payout ratio of 39.56% suggests that the dividends are well-covered by earnings, while the 81.08% free cash flow-based ratio indicates a closer margin in terms of free cash flow.
💡 Cashflow & Capital Efficiency
Understanding cash flow stability and capital efficiency offers insights into the company's operational effectiveness and its ability to reinvest in growth.
| Metric | 2024 | 2023 | 2022 |
|---|---|---|---|
| Free Cash Flow Yield | 2.55% | 1.87% | 2.58% |
| Earnings Yield | 3.15% | 2.88% | 2.58% |
| CAPEX to Operating Cash Flow | 20.42% | 24.30% | 18.35% |
| Stock-based Compensation to Revenue | 0% | 0% | 0.18% |
| Free Cash Flow / Operating Cash Flow Ratio | 79.57% | 75.70% | 81.65% |
The company's free cash flow yield and cash flow to operating ratio demonstrate consistent cash flow generation, crucial for funding dividends and growth without external financing.
📊 Balance Sheet & Leverage Analysis
A robust balance sheet ensures the company's ability to meet its financial obligations and invest in growth opportunities without excessive risk.
| Metric | 2024 | 2023 | 2022 |
|---|---|---|---|
| Debt-to-Equity | 0% | 6.75% | 8.46% |
| Debt-to-Assets | 0% | 4.54% | 5.47% |
| Debt-to-Capital | 0% | 6.32% | 7.80% |
| Net Debt to EBITDA | -0.44 | -0.05 | -0.05 |
| Current Ratio | 0% | 131.20% | 137.57% |
| Quick Ratio | 142.68% | 131.20% | 154.99% |
| Financial Leverage | 145.36% | 148.66% | 154.61% |
The negative net debt to EBITDA and low leverage ratios signify minimal debt use, translating into strong financial stability and liquidity.
📈 Fundamental Strength & Profitability
Assessing fundamental strength and profitability provides insights into the company's financial efficiency and ability to generate returns on its investments.
| Metric | 2024 | 2023 | 2022 |
|---|---|---|---|
| Return on Equity | 30.21% | 26.83% | 20.61% |
| Return on Assets | 20.78% | 18.04% | 13.33% |
| Net Profit Margin | 15.82% | 13.65% | 10.51% |
| EBIT Margin | 19.95% | 15.74% | 13.32% |
| EBITDA Margin | 17.82% | 18.36% | 15.14% |
| Gross Margin | 100% | 15.92% | 13.27% |
Erie's ability to maintain high returns on equity and assets demonstrates its operational efficiency, while robust margins underscore its profitability potential.
Price Development
🗣️ Dividend Scoring System
| Criteria | Score | Score Bar |
|---|---|---|
| Dividend yield | 2 | |
| Dividend Stability | 5 | |
| Dividend growth | 4 | |
| Payout ratio | 3 | |
| Financial stability | 5 | |
| Dividend continuity | 5 | |
| Cashflow Coverage | 4 | |
| Balance Sheet Quality | 5 |
Total Score: 33 out of 40
Rating
Erie Indemnity Company presents a strong investment opportunity with steady dividend growth and exceptional financial stability. This company offers an appealing option for risk-averse investors aiming for long-term dividend returns. Despite a modest current yield, the strength of their balance sheet and consistent dividend history justifies a bullish stance on their stock. Overall, Erie Indemnity Company is rated a 'Buy' for its compelling dividend profile.