Erie Indemnity Company operates in four segments, including management operations, property and casualty insurance operations, life insurance operations and investment operations. The company was founded in 1925 and is based in Erie, Pennsylvania.
ERIE Price Forecast Based on DCF Valuation
DCF Fair Value Target:
The table below illustrates the output of a discounted cash flow forecast using a variety of scenarios for Erie Indemnity Co. To summarize, we found that Erie Indemnity Co ranked in the 10th percentile in terms of potential gain offered. Our DCF analysis suggests the stock is overvalued by about 93.83%. In terms of the factors that were most noteworthy in this DCF analysis for ERIE, they are:
Its compound free cash flow growth rate, as measured over the past 5.5 years, is -0.17% -- higher than merely 9.6% of stocks in our DCF forecasting set.
The business' balance sheet reveals debt to be 1% of the company's capital (with equity being the remaining amount). Approximately only 5.62% of US stocks with free cash flow have a lower reliance on debt in their capital structure.
The company's cost of debt, derived from its interest coverage, tax rate, and market capitalization, is greater than just 0% of stocks in its sector (Financial Services).
Terminal Growth Rate in Free Cash Flow
Return Relative to Current Share Price
Want more companies with a valuation profile/forecast similar to that of Erie Indemnity Co? See RILY, GEG, EZPW, STFC, and WETF.
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ERIE, Pa. , Dec. 8, 2020 /PRNewswire/ -- At its regular meeting held Dec. 8, 2020 , the Board of Directors of Erie Indemnity Company (NASDAQ: ERIE ) set the management fee rate charged to Erie Insurance Exchange, approved an increase in shareholder dividends and declared the quarterly dividend and a special cash dividend. Erie Indemnity Company has paid regular shareholder dividends since 1933. The Board agreed to maintain the current management fee rate paid to Erie Indemnity Company by Erie Insurance Exchange at 25 percent, effective Jan. 1, 2021 . The management fee rate was 25 percent for the period Jan. 1 through Dec. 31, 2020 . The Board has the authority under the agreement with the subscribers (policyholders) at Erie Insurance Exchange to set the management fee rate at its discr...
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