Financial Analysis: Erie Indemnity (ERIE) versus The Competition
Erie Indemnity (NASDAQ: ERIE) is one of 92 public companies in the “Property & Casualty Insurance” industry, but how does it weigh in compared to its peers? We will compare Erie Indemnity to similar businesses based on the strength of its earnings, dividends, analyst recommendations, risk, profitability, valuation and institutional ownership.
Insider & Institutional Ownership
31.0% of Erie Indemnity shares are owned by institutional investors. Comparatively, 60.8% of shares of all “Property & Casualty Insurance” companies are owned by institutional investors. 46.8% of Erie Indemnity shares are owned by insiders. Comparatively, 15.5% of shares of all “Property & Casualty Insurance” companies are owned by insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a company will outperform the market over the long term.
This table compares Erie Indemnity and its peers’ net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
|Erie Indemnity Competitors||10.09%||5.29%||2.71%|
Volatility & Risk
Erie Indemnity has a beta of 0.47, indicating that its stock price is 53% less volatile than the S&P 500. Comparatively, Erie Indemnity’s peers have a beta of 0.93, indicating that their average stock price is 7% less volatile than the S&P 500.
Erie Indemnity pays an annual dividend of $3.13 per share and has a dividend yield of 2.6%. Erie Indemnity pays out 78.4% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. As a group, “Property & Casualty Insurance” companies pay a dividend yield of 1.4% and pay out 26.8% of their earnings in the form of a dividend. Erie Indemnity has raised its dividend for 21 consecutive years.
This is a summary of current recommendations for Erie Indemnity and its peers, as provided by MarketBeat.com.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
|Erie Indemnity Competitors||602||2244||2125||42||2.32|
As a group, “Property & Casualty Insurance” companies have a potential downside of 0.78%. Given Erie Indemnity’s peers higher possible upside, analysts clearly believe Erie Indemnity has less favorable growth aspects than its peers.
Earnings and Valuation
This table compares Erie Indemnity and its peers revenue, earnings per share and valuation.
|Gross Revenue||EBITDA||Price/Earnings Ratio|
|Erie Indemnity||$1.65 billion||$303.02 million||29.82|
|Erie Indemnity Competitors||$11.75 billion||$2.00 billion||36.20|
Erie Indemnity’s peers have higher revenue and earnings than Erie Indemnity. Erie Indemnity is trading at a lower price-to-earnings ratio than its peers, indicating that it is currently more affordable than other companies in its industry.
Erie Indemnity peers beat Erie Indemnity on 7 of the 12 factors compared.
Erie Indemnity Company Profile
Erie Indemnity Company is a management company. The Company serves as the attorney-in-fact for the subscribers (policyholders) at the Erie Insurance Exchange (Exchange). The Exchange is a reciprocal insurer that writes property and casualty insurance. The Company’s function is to perform certain services for the Exchange relating to the sales, underwriting and issuance of policies on behalf of the Exchange. The sales related services the Company provides include agent compensation, and certain sales and advertising support services. Agent compensation includes scheduled commissions to agents based upon premiums written, as well as additional commissions and bonuses to agents. The underwriting services the Company provides include underwriting and policy processing expenses. It provides information technology services that supports various functions. The remaining services the Company provides include customer service and administrative costs.
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