August 28, 2025 a 03:32 am
ERIE: Dividend Analysis - Erie Indemnity Company
Erie Indemnity Company stands out as a long-time player in the insurance industry with a consistent dividend payment history. Despite a modest dividend yield, the consistency over 31 years is impressive. However, potential investors should consider the 2021 suspension when evaluating future expectations. With moderate dividend growth and solid payout ratios, ERIE seems well-positioned for stability and moderate growth.
📊 Overview
Erie Indemnity Company operates in the insurance sector and offers a competitive dividend yield of 1.56% given its historical stability. The current dividend per share stands at $5.14, backed by a strong dividend history of 31 years, albeit with a notable suspension in 2021.
| Sector | Dividend Yield | Current Dividend per Share | Dividend History | Last Cut/Suspension |
|---|---|---|---|---|
| Insurance | 1.56% | $5.14 | 31 years | 2021 |
📈 Dividend History
The dividend history reveals stability and commitment to returning value to shareholders. This consistency over decades underpins investor confidence, despite the recent cut in 2021.
| Year | Dividend per Share (USD) |
|---|---|
| 2025 | 5.46 |
| 2024 | 5.10 |
| 2023 | 4.76 |
| 2022 | 4.44 |
| 2021 | 4.14 |
📈 Dividend Growth
Over 3 years, dividends have grown at a rate of 7.20%, aligning with investor expectations for sustainable growth. Over 5 years, the growth rate is marginally higher at 7.21%, indicating a consistent growth trajectory.
| 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
Payout ratios help ascertain the sustainability of dividends. Erie Indemnity maintains a 38.01% EPS-based and a 42.11% FCF-based payout ratio, portraying well-balanced dividend payments relative to earnings.
| Key Figure | Ratio |
|---|---|
| EPS-Based | 38.01% |
| Free Cash Flow-Based | 42.11% |
The reasonable payout ratios suggest a sustainable dividend, with room for potential increase while maintaining financial health.
💰 Cashflow & Capital Efficiency
Cashflow and capital efficiency are crucial for backing dividend payments and growing shareholder value.
| Year | 2024 | 2023 | 2022 |
|---|---|---|---|
| Free Cash Flow Yield | 2.55% | 1.87% | 2.60% |
| Earnings Yield | 3.15% | 2.88% | 2.60% |
| CAPEX to Operating Cash Flow | 20.42% | 24.30% | 18.35% |
| Stock-based Compensation to Revenue | 0% | 0% | 0% |
| Free Cash Flow/Operating Cash Flow Ratio | 79.58% | 75.70% | 81.65% |
Erie's consistent cash flow ratios highlight its strong operational cash generation capacity, crucial for sustaining and enhancing dividends.
📊 Balance Sheet & Leverage Analysis
A robust balance sheet ensures financial stability, supporting future growth and dividend payouts.
| Year | 2024 | 2023 | 2022 |
|---|---|---|---|
| Debt-to-Equity | 0.38% | 6.75% | 8.46% |
| Debt-to-Assets | 0.26% | 4.54% | 5.47% |
| Debt-to-Capital | 0.38% | 6.32% | 7.80% |
| Net Debt to EBITDA | -0.33 | -0.03 | -0.05 |
| Current Ratio | 1.43 | 1.31 | 1.11 |
| Quick Ratio | 1.43 | 1.31 | 1.11 |
| Financial Leverage | 1.45 | 1.49 | 1.55 |
Erie's low debt and healthy ratios underscore its financial resilience and capacity to manage obligations, benefiting shareholders with reliable dividend streams.
✅ Fundamental Strength & Profitability
Strong fundamentals and profitability support growth prospects and dividend payouts.
| Year | 2024 | 2023 | 2022 |
|---|---|---|---|
| Return on Equity | 30.21% | 26.83% | 20.61% |
| Return on Assets | 20.78% | 18.04% | 13.33% |
| Margins: Net | 15.54% | 13.65% | 10.47% |
| Margins: Gross | 17.51% | 17.15% | 13.58% |
| Margins: EBIT | 19.61% | 15.74% | 13.27% |
| Margins: EBITDA | 21.26% | 17.38% | 15.09% |
| Research & Development to Revenue | 0% | 0% | 0% |
Robust return metrics and healthy profitability margins highlight Erie's efficient operations, indicating strong potential for dividend maintenance and growth.
⚠️ Price Development
🏆 Dividend Scoring System
| Category | Score | |
|---|---|---|
| Dividend Yield | 2 | |
| Dividend Stability | 4 | |
| Dividend Growth | 3 | |
| Payout Ratio | 4 | |
| Financial Stability | 5 | |
| Dividend Continuity | 3 | |
| Cashflow Coverage | 4 | |
| Balance Sheet Quality | 5 |
Total Score: 30/40
🗣️ Rating
In conclusion, Erie Indemnity Company presents itself as a stable investment with solid dividend payouts and financial metrics. While the yield might not be high, the stability and potential for moderate growth make it an appealing choice for dividend-focused investors. The company scores a respectable 30 out of 40 in our dividend scoring system, reflecting strong financial resilience and effective capital management. Potential investors should consider their risk tolerance and growth expectations when evaluating ERIE for their portfolio.