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Erie Indemnity Boosts Shareholders' Value With Dividend Hike
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In its concerted effort to share more profits with shareholders, the board of directors of Erie Indemnity Company (ERIE - Free Report) approved a 7.3% hike in quarterly dividend. The company will now pay a quarterly dividend of 84 cents per Class A share compared with 78.25 cents paid on Oct 20. Shareholders of record as of Jan 8 will be rewarded with the meatier dividend in their pockets on Jan 23, 2018.
The board had earlier also raised the dividend for Class B shares to $126.00 from $117.34 per share.
Following the 7.3% increase, the annualized rate for Class A shares scales to $3.36 per share. Based on the closing share price of $119.25 as of Dec 8, the hiked payout implies a dividend yield of 2.8, better than the industry average of 1.6.
Erie Indemnity has a solid track of raising its annual dividend. The metric has witnessed a five-year CAGR of 7.2%. The company has been paying dividends to its shareholders since 1933.
Erie Indemnity’s effective capital deployment is well-supported by a solid cash flow, which in turn is driven by a sustained robust operational performance. The company has delivered positive surprises in two of the last four quarters and has disbursed a payout amount of $109 million in the first three quarters of 2017, banking on continued growth and profitability.
Shares of Erie Indemnity have gained 6.1% in a year, underperforming the industry’s increase of 21.2%. We believe the company’s initiative to create value for shareholders will help drive up the shares.
Shareholder-friendly moves like sharing more profit via dividends and share repurchases seems a well-accepted strategy among insurers to fortify investors’ confidence in their stock. Last month, the board members of Assurant Inc. (AIZ - Free Report) had approved a 6% hike in its dividend while Sun Life Financial Inc. (SLF - Free Report) raised the same by 5%. RLI Corp. (RLI - Free Report) has announced a special dividend of $1.75.
It's hard to believe, even for us at Zacks. But while the market gained +18.8% from 2016 - Q1 2017, our top stock-picking screens have returned +157.0%, +128.0%, +97.8%, +94.7%, and +90.2% respectively.
And this outperformance has not just been a recent phenomenon. Over the years it has been remarkably consistent. From 2000 - Q1 2017, the composite yearly average gain for these strategies has beaten the market more than 11X over. Maybe even more remarkable is the fact that we're willing to share their latest stocks with you without cost or obligation.
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Erie Indemnity Boosts Shareholders' Value With Dividend Hike
In its concerted effort to share more profits with shareholders, the board of directors of Erie Indemnity Company (ERIE - Free Report) approved a 7.3% hike in quarterly dividend. The company will now pay a quarterly dividend of 84 cents per Class A share compared with 78.25 cents paid on Oct 20. Shareholders of record as of Jan 8 will be rewarded with the meatier dividend in their pockets on Jan 23, 2018.
The board had earlier also raised the dividend for Class B shares to $126.00 from $117.34 per share.
Following the 7.3% increase, the annualized rate for Class A shares scales to $3.36 per share. Based on the closing share price of $119.25 as of Dec 8, the hiked payout implies a dividend yield of 2.8, better than the industry average of 1.6.
Erie Indemnity has a solid track of raising its annual dividend. The metric has witnessed a five-year CAGR of 7.2%. The company has been paying dividends to its shareholders since 1933.
Erie Indemnity’s effective capital deployment is well-supported by a solid cash flow, which in turn is driven by a sustained robust operational performance. The company has delivered positive surprises in two of the last four quarters and has disbursed a payout amount of $109 million in the first three quarters of 2017, banking on continued growth and profitability.
Shares of Erie Indemnity have gained 6.1% in a year, underperforming the industry’s increase of 21.2%. We believe the company’s initiative to create value for shareholders will help drive up the shares.
Shareholder-friendly moves like sharing more profit via dividends and share repurchases seems a well-accepted strategy among insurers to fortify investors’ confidence in their stock. Last month, the board members of Assurant Inc. (AIZ - Free Report) had approved a 6% hike in its dividend while Sun Life Financial Inc. (SLF - Free Report) raised the same by 5%. RLI Corp. (RLI - Free Report) has announced a special dividend of $1.75.
Erie Indemnity carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
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It's hard to believe, even for us at Zacks. But while the market gained +18.8% from 2016 - Q1 2017, our top stock-picking screens have returned +157.0%, +128.0%, +97.8%, +94.7%, and +90.2% respectively.
And this outperformance has not just been a recent phenomenon. Over the years it has been remarkably consistent. From 2000 - Q1 2017, the composite yearly average gain for these strategies has beaten the market more than 11X over. Maybe even more remarkable is the fact that we're willing to share their latest stocks with you without cost or obligation.
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