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Acquisition $ERIE

With this recent acquisition I went with Erie Indemnity Co. (ERIE) as it has been on my watch list for some time now and one of my alerts notified that it was sale, well somewhat. Not a total steal here, but still got a fairly valued price. This is as boring as a company business can get – insurance… Insurance has been around for centuries and I am not seeing it going away well basically ever. I also believe that this is a great insurance for my “The Dividend Machine” if it ever breaks down. That was a joke guys and gals try to relax! Essentially, I like this ancient insurance business model as my other two holdings Aflac, Inc. (AFL) and Travelers Companies, Inc. (TRV) have done great by paying and growing dividends as well as steadily increasing in price. Oh also one last note, I am a longterm customer and their rates are even better than any other insurers (even some very Military friendly ones) and Erie still beat them! Has to be something right? Competitive or Non-Competative advantage?

Company Overview: 

Erie Indemnity Company was founded in 1925 and is headquartered in Erie, Pennsylvania. It provides sales, underwriting, and policy issuance services to the policyholders of Erie Insurance Exchange primarily in the Midwest, mid-Atlantic, and Southeast regions of the United States. The company sells its products through independent insurance agents. The company has a wide range of diversified insurance products such as auto insurance, motorcycle insurance, insurance coverage for car collectors, ATVs, RVs, boat insurance, homeowners insurance, renters insurance, condo insurance, mobile home insurance, personal valuables insurance, flood insurance, life insurance, personal catastrophe liability insurance, identity theft recovery coverage, business and commercial insurance.

Statistics:

  • Dividend Yield: 2.9%
  • 10Yr Dividend Growth Rate: 6.9%
  • 5 Yr Dividend Growth Rate: 7.2%
  • 3Yr Dividend Growth Rate: 7.2%
  • Payout Ratio: 68.0%
  • P/E: 28.8
  • Consecutive Years of Dividend Raises: 22
  • Dividend Payout: Quarterly

I purchased 18 shares of Erie Indemnity Co. (ERIE) for the price of $115.94 per share for a total investment of $2,086.92 adding around $60.48 to my annual dividend income.

This is the 1st time I am initiating a stock acquisition this year. This transaction is my first ever purchase of ERIE stock shares into the portfolio. Currently, ERIE ownership stake represents to be around 1.7% of my current portfolio value. Also, the acquisition of ERIE makes it the 39th company or ownership stake I am invested in.

Conclusion:

The Portfolio “The Dividend Machine” has been updated with link ➡️ here.

Thank you for reading & have a great day!

6 Comments

  1. Tom from Dividends Diversify on January 27, 2018 at 19:45

    Looks like a good buy Vet. I’m not familiar with Erie in the insurance sector, but own CINF and CB. Good luck with it and happy new year. Tom

    • DividendVet on January 28, 2018 at 18:51

      Erie is a dividend sleeper that has been steadily increasing their dividends for over 22 years now. Been paying their insurance policies for cars and property for years now, and like I said very competitive rates! In the end I think it is a mutual relationship, they have a great business and service and I send them money and in exchange they send me dividends. 🙂

      Happy New Year!

  2. dividendgeek on January 27, 2018 at 21:15

    Very nice stock. All statistics look good. Love the yield.

    • DividendVet on January 28, 2018 at 18:54

      Thanks, the business is boring, the statistics are boring and nothing crazy, the yield is boring and so overall very DGI boring purchase. Buffet would be proud!

      Thanks for stopping by.

  3. Engineering Dividends on January 28, 2018 at 15:15

    Hey DV. I’m not familiar with ERIE. The dividend yield, dividend growth rate, and consecutive years of raises look great. The P/E ratio looks high for an insurer, though. How does this compare to ERIE’s recent past? Thanks for uncovering new dividend stocks and sharing them.

    • DividendVet on January 28, 2018 at 19:05

      You are totally right. The P/E ratio is a bit higher than usual as my criteria for P/E ratio is usually under 20, but sometimes you have to buy quality over cigar bud and pay the higher price. When you take a look at Erie’s historic P/E ratio over last 5 years this company has never been lower than 20 P/E.

      Please is all mine.

      Take care.

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