NasdaqGS:ERIE

Stock Analysis Report

Executive Summary

Erie Indemnity Company operates as a managing attorney-in-fact for the subscribers at the Erie Insurance Exchange in the United States.

Rewards

Earnings are forecast to grow 6.71% per year

Earnings grew by 23.9% over the past year

Pays a reliable dividend of 2.13%

Risk Analysis

Highly volatile share price over past 3 months



Snowflake Analysis

Outstanding track record average dividend payer.


Similar Companies

Share Price & News

How has Erie Indemnity's share price performed over time and what events caused price changes?


Latest Share Price and Events

Stable Share Price: ERIE's share price has been volatile over the past 3 months.


Market Performance


7 Day Return

-1.5%

ERIE

-0.9%

US Insurance

-0.3%

US Market


1 Year Return

28.6%

ERIE

20.2%

US Insurance

18.6%

US Market

Return vs Industry: ERIE exceeded the US Insurance industry which returned 20.2% over the past year.

Return vs Market: ERIE exceeded the US Market which returned 18.6% over the past year.


Shareholder returns

ERIEIndustryMarket
7 Day-1.5%-0.9%-0.3%
30 Day-4.4%0.8%2.2%
90 Day-21.8%0.8%5.6%
1 Year31.3%28.6%23.1%20.2%21.1%18.6%
3 Year59.0%47.5%32.2%22.1%45.6%36.2%
5 Year113.4%86.2%67.6%47.6%71.1%52.2%

Price Volatility Vs. Market

How volatile is Erie Indemnity's share price compared to the market and industry in the last 5 years?


Simply Wall St News

Valuation

Is Erie Indemnity undervalued compared to its fair value and its price relative to the market?

27.67x

Price to Earnings (PE) ratio


Share Price vs. Fair Value

Below Fair Value: ERIE ($169.07) is trading above our estimate of fair value ($87.73)

Significantly Below Fair Value: ERIE is trading above our estimate of fair value.


Price To Earnings Ratio

PE vs Industry: ERIE is poor value based on its PE Ratio (27.7x) compared to the Insurance industry average (16.7x).

PE vs Market: ERIE is poor value based on its PE Ratio (27.7x) compared to the US market (18.5x).


Price to Earnings Growth Ratio

PEG Ratio: ERIE is poor value based on its PEG Ratio (4.1x)


Price to Book Ratio

PB vs Industry: ERIE is overvalued based on its PB Ratio (7.9x) compared to the US Insurance industry average (1.2x).


Next Steps

Future Growth

How is Erie Indemnity forecast to perform in the next 1 to 3 years based on estimates from 1 analyst?

6.7%

Forecasted annual earnings growth


Earnings and Revenue Growth Forecasts


Analyst Future Growth Forecasts

Earnings vs Savings Rate: ERIE's forecast earnings growth (6.7% per year) is above the savings rate (1.7%).

Earnings vs Market: ERIE's earnings (6.7% per year) are forecast to grow slower than the US market (14.2% per year).

High Growth Earnings: ERIE's earnings are forecast to grow, but not significantly.

Revenue vs Market: ERIE's revenue (4.4% per year) is forecast to grow slower than the US market (7.4% per year).

High Growth Revenue: ERIE's revenue (4.4% per year) is forecast to grow slower than 20% per year.


Earnings per Share Growth Forecasts


Future Return on Equity

Future ROE: Insufficient data to determine if ERIE's Return on Equity is forecast to be high in 3 years time


Next Steps

Past Performance

How has Erie Indemnity performed over the past 5 years?

13.5%

Historical annual earnings growth


Earnings and Revenue History

Quality Earnings: ERIE has high quality earnings.

Growing Profit Margin: ERIE's current net profit margins (13%) are higher than last year (11.7%).


Past Earnings Growth Analysis

Earnings Trend: ERIE's earnings have grown by 13.5% per year over the past 5 years.

Accelerating Growth: ERIE's earnings growth over the past year (23.9%) exceeds its 5-year average (13.5% per year).

Earnings vs Industry: ERIE earnings growth over the past year (23.9%) exceeded the Insurance industry -10.4%.


Return on Equity

High ROE: ERIE's Return on Equity (28.5%) is considered high.


Return on Assets


Return on Capital Employed


Next Steps

Financial Health

How is Erie Indemnity's financial position? (This company is analysed differently as a bank or financial institution)


Financial Position Analysis


Debt to Equity History and Analysis


Balance Sheet

Inventory Level: ERIE has a low level of unsold assets or inventory.

Debt Coverage by Assets: ERIE's debt is covered by short term assets (assets are 9.5x debt).


Financial Institutions Analysis

Asset Level: ERIE's level of assets compared to its equity is low.

Allowance for Bad Loans: Insufficient data to determine if ERIE has a sufficient allowance for bad loans.

Low Risk Liabilities: ERIE reports no customer deposits, loans are made up entirely of externally borrowed funds.

Loan Level: Insufficient data to determine if ERIE has an acceptable proportion of non-loan assets held.

Low Risk Deposits: ERIE has advanced significantly more loans than the customer deposits it holds.

Level of Bad Loans: Insufficient data to determine if ERIE has an appropriate level of bad loans.


Next Steps

Dividend

What is Erie Indemnity's current dividend yield, its reliability and sustainability?

2.13%

Current Dividend Yield


Dividend Yield vs Market

company2.1%marketbottom25%1.4%markettop25%3.7%industryaverage2.3%forecastin3Years2.1%

Current dividend yield vs market & industry

Notable Dividend: ERIE's dividend (2.13%) is higher than the bottom 25% of dividend payers in the US market (1.42%).

High Dividend: ERIE's dividend (2.13%) is low compared to the top 25% of dividend payers in the US market (3.7%).


Stability and Growth of Payments

Stable Dividend: ERIE's dividends per share have been stable in the past 10 years.

Growing Dividend: ERIE's dividend payments have increased over the past 10 years.


Current Payout to Shareholders

Dividend Coverage: With its reasonable payout ratio (58.9%), ERIE's dividend payments are covered by earnings.


Future Payout to Shareholders

Future Dividend Coverage: Insufficient data to determine if a dividend will be paid in 3 years and that it will be covered by earnings.


Next Steps

Management

What is the CEO of Erie Indemnity's salary, the management and board of directors tenure and is there insider trading?

4.2yrs

Average management tenure


CEO

Tim NeCastro (59yo)

3.3yrs

Tenure

US$3,495,963

Compensation

Mr. Timothy Gerard NeCastro, also known as Tim, CPA, CIC, is President of Erie Indemnity Company since January 1, 2017 and its Chief Executive Officer since August 2016. Mr. NeCastro is President and Chief ...


CEO Compensation Analysis

Compensation vs Market: Tim's total compensation ($USD3.50M) is below average for companies of similar size in the US market ($USD6.81M).

Compensation vs Earnings: Tim's compensation has been consistent with company performance over the past year.


Management Age and Tenure

4.2yrs

Average Tenure

56yo

Average Age

Experienced Management: ERIE's management team is considered experienced (4.2 years average tenure).


Board Age and Tenure

9.6yrs

Average Tenure

66yo

Average Age

Experienced Board: ERIE's board of directors are considered experienced (9.6 years average tenure).


Insider Trading

Insider Buying: ERIE insiders have only sold shares in the past 3 months.


Recent Insider Transactions

SellUS$4,200,06618 Sep 19
John Borneman
EntityIndividual
Role
Member of the Board of Directors
Director
Shares20,000
Max PriceUS$210.00
BuyUS$165,02413 Jun 19
Elizabeth Ann Vorsheck
EntityIndividual
Role
Member of the Board of Directors
Independent Director
Shares686
Max PriceUS$240.56
SellUS$1,764,71027 Mar 19
John Borneman
EntityIndividual
Role
Member of the Board of Directors
Director
Shares10,000
Max PriceUS$176.60
BuyUS$20,01425 Mar 19
Brian Hudson
EntityIndividual
Role
Member of the Board of Directors
Independent Director
Shares115
Max PriceUS$174.03
BuyUS$99,75002 Jan 19
Louis Colaizzo
EntityIndividual
Shares750
Max PriceUS$133.00
BuyUS$40,57828 Dec 18
Salvatore Correnti
EntityIndividual
Role
Member of the Board of Directors
Independent Director
Shares320
Max PriceUS$126.81

Ownership Breakdown

Dilution of Shares: Shareholders have not been meaningfully diluted in the past year.


Management Team

  • Tim NeCastro (59yo)

    President & CEO

    • Tenure: 3.3yrs
    • Compensation: US$3.50m
  • Brad Postema

    Senior VP & Chief Investment Officer

    • Tenure: 7.5yrs
    • Compensation: US$1.04m
  • Charles Fletcher

    Senior Vice President of Sales & Marketing

    • Tenure: 0yrs
  • Bob Ingram (60yo)

    Executive VP & Chief Information Officer

    • Tenure: 7.3yrs
    • Compensation: US$1.33m
  • Doug Smith (45yo)

    Executive Vice President of Sales & Products

    • Tenure: 3.1yrs
  • Greg Gutting (56yo)

    Executive VP & CFO

    • Tenure: 4.2yrs
    • Compensation: US$1.13m
  • Bill Matrogran

    Vice President of Construction Management & Operations

    • Tenure: 0yrs
  • Scott Beilharz

    Vice President of Capital Management & Investor Relations

    • Tenure: 7.9yrs
  • Julie Pelkowski (49yo)

    Senior VP & Controller

    • Tenure: 0yrs
  • Sheryl Rucker

    Senior Vice President of Law Division

    • Tenure: 1.7yrs

Board Members

  • Eugene Connell (64yo)

    Independent Director

    • Tenure: 2.7yrs
    • Compensation: US$157.50k
  • George Lucore (68yo)

    Independent Director

    • Tenure: 3.7yrs
    • Compensation: US$153.00k
  • Tom Hagen (83yo)

    Chairman of the Board

    • Tenure: 12.3yrs
    • Compensation: US$254.28k
  • John Borneman (80yo)

    Director

    • Tenure: 27.7yrs
    • Compensation: US$154.00k
  • Sal Correnti (58yo)

    Independent Director

    • Tenure: 1.7yrs
    • Compensation: US$123.00k
  • Charles Hartz (73yo)

    Independent Director

    • Tenure: 16.7yrs
    • Compensation: US$147.00k
  • Jonathan Hagen (56yo)

    Vice Chairman of the Board

    • Tenure: 6.9yrs
    • Compensation: US$172.00k
  • Thomas Palmer (71yo)

    Independent Director

    • Tenure: 13.7yrs
    • Compensation: US$189.00k
  • Elizabeth Ann Vorsheck (63yo)

    Independent Director

    • Tenure: 12.7yrs
    • Compensation: US$156.63k
  • Brian Hudson (64yo)

    Independent Director

    • Tenure: 2.7yrs
    • Compensation: US$178.50k

Company Information

Erie Indemnity Company's company bio, employee growth, exchange listings and data sources


Key Information

  • Name: Erie Indemnity Company
  • Ticker: ERIE
  • Exchange: NasdaqGS
  • Founded: 1925
  • Industry: Property and Casualty Insurance
  • Sector: Insurance
  • Market Cap: US$7.739b
  • Shares outstanding: 46.19m
  • Website: https://www.erieinsurance.com

Number of Employees


Location

  • Erie Indemnity Company
  • 100 Erie Insurance Place
  • Erie
  • Pennsylvania
  • 16530
  • United States

Listings

TickerExchangePrimary SecuritySecurity TypeCountryCurrencyListed on
ERIENasdaqGS (Nasdaq Global Select)YesClass A Non-Voting Common StockUSUSDOct 1995

Biography

Erie Indemnity Company operates as a managing attorney-in-fact for the subscribers at the Erie Insurance Exchange in the United States. The company provides sales, underwriting, and policy issuance service ...


Company Analysis and Financial Data Status

All financial data provided by Standard & Poor's Capital IQ.
DataLast Updated (UTC time)
Company Analysis2019/12/06 23:35
End of Day Share Price2019/12/06 00:00
Earnings2019/09/30
Annual Earnings2018/12/31


Unless specified all financial data is based on a yearly period but updated quarterly. This is known as Trailing Twelve Month (TTM) or Last Twelve Month (LTM) Data. Learn more here.