October 11, 2025 a 02:47 am
ERIE: Dividend Analysis - Erie Indemnity Company
Erie Indemnity Company, with its long-standing history of consistent dividend payments and a moderate yet steady growth rate, offers a reliable income stream for dividend-focused investors. Despite a recent dividend suspension in 2021, the company has a proven track record over the past 31 years, marking resilience in volatile markets.
📊 Overview
The Erie Indemnity Company operates within the Financial sector, providing services crucial to its domain. Below is a snapshot of its key dividend metrics:
| Metric | Value |
|---|---|
| Sector | Financial |
| Dividend yield | 1.73% |
| Current dividend per share | 5.14 USD |
| Dividend history | 31 years |
| Last cut or suspension | 2021 |
📈 Dividend History
A robust dividend history indicates the company's commitment to returning value to shareholders. Consistency in dividends is often a sign of strong corporate governance and financial health.
| Year | Dividend per share (USD) |
|---|---|
| 2025 | 5.46 |
| 2024 | 5.10 |
| 2023 | 4.76 |
| 2022 | 4.44 |
| 2021 | 4.14 |
📊 Dividend Growth
Dividend growth is a vital component for investors seeking income that outpaces inflation. Erie Indemnity Company presents a modest growth trajectory over recent years:
| Time | Growth |
|---|---|
| 3 years | 7.2% |
| 5 years | 7.2% |
The average dividend growth is 7.2% over 5 years. This shows moderate but steady dividend growth.
Payout Ratio
The payout ratio is a key indicator of sustainability. A lower ratio suggests a safer dividend:
| Key Figure | Ratio |
|---|---|
| EPS-based | 38.01% |
| Free cash flow-based | 42.11% |
With an EPS payout ratio of 38.01% and a free cash flow payout ratio of 42.11%, Erie Indemnity demonstrates a conservative approach, maintaining a substantial buffer for dividend coverages even in leaner periods.
Cashflow & Capital Efficiency
Examining cash flow metrics is crucial as they highlight the company's efficiency in generating cash from operations, which funds dividends, debt repayment, and growth initiatives:
| 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% |
The robust cash generation and capital allocation prioritization underpin the company's ability to sustain and potentially grow its dividend distribution.
Balance Sheet & Leverage Analysis
Comprehending leverage ratios is indispensable for assessing financial stability and flexibility:
| 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 | -0.326 | -0.034 | -0.046 |
| Current Ratio | 1.43 | 1.31 | 1.11 |
| Quick Ratio | 1.43 | 1.31 | 1.11 |
| Financial Leverage | 1.45 | 1.49 | 1.55 |
Low debt ratios combined with healthy liquidity metrics indicate strong financial standing, allowing for strategic flexibility and reduced risk exposure.
Fundamental Strength & Profitability
Profitability measures demonstrate the efficiency in using assets and equity to generate earnings:
| 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% |
| EBIT Margin | 19.61% | 15.74% | 13.27% |
| EBITDA Margin | 21.26% | 17.38% | 15.77% |
| Gross Margin | 17.51% | 17.15% | 13.58% |
| R&D to Revenue | 0% | 0% | 0% |
High profitability metrics reflect efficient operations, supporting future growth prospects and financial flexibility.
Price Development
🗣️ Dividend Scoring System
| Criteria | Score | |
|---|---|---|
| Dividend yield | 3/5 | |
| Dividend Stability | 4/5 | |
| Dividend growth | 3/5 | |
| Payout ratio | 4/5 | |
| Financial stability | 5/5 | |
| Dividend continuity | 4/5 | |
| Cashflow Coverage | 5/5 | |
| Balance Sheet Quality | 5/5 |
Overall Score: 33/40
✅ Rating
Given the analysis, Erie Indemnity Company emerges as a solid investment for dividend-seeking investors. While the yield is moderate, its strong financial foundation, consistent dividend history, and efficient operational metrics make it a reliable choice. Investors can consider Erie as a reputable option in the financial sector for both income and moderate growth potential.