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Erie Indemnity (ERIE) Ups Dividend, Okays Special Dividend

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In its concerted efforts to enhance shareholder value, the board of directors of Erie Indemnity Company (ERIE - Free Report) approved a 7.3% hike in its dividend and also announced a special dividend.

With this, the payout now stands at $1.035 per Class A share compared with the earlier payout of 96.5 cents per share and $155.25 on per Class B share compared with the earlier payout of $144.75 per share. The company has been paying dividends since 1933. Based on the stock’s Dec 8 closing price of $222.25, the new dividend on Class A shares will yield 1.9%, better than the industry average of 1.3%.

The company has increased dividend each year, reflecting operational excellence and the company’s commitment to return value to its shareholders. The company’s dividend witnessed a 10-year CAGR of 7.2%.

Concurrently, the board also approved a special one-time cash dividend of $2 on each Class A share and $3 on each Class B share, to be paid out on Dec 29, 2020, to shareholders of record as of Dec 21, 2020, with a dividend ex-date of Dec 18, 2020. The company paid a special dividend of $3 on Class B shares in 2012.

Effective capital deployment by this Zacks Rank #3 (Hold) company is supported by its balance sheet strength. Apart from dividend payouts, the company also buys back shares. Though it did not buy back any share in the first nine months of 2020, it had $17.8 million remaining under its buyback authorization.

Fortifying business platforms and use of data as well as identifying and developing new sources of revenues should help the company maintain the streak.

Shares of Erie Indemnity have rallied 33.9% year to date compared with the industry’s increase of 2.9%. Operational excellence and solid capital position should help shares bounce back.



Recently, The Hanover Insurance Group’s (THG - Free Report) board of directors approved a 7.7% hike in quarterly dividend while Assurant’s (AIZ - Free Report) board of directors approved a 5% hike. The board of RLI Corp. (RLI - Free Report) approved a special cash dividend of $1.00 per share.

You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

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