Are Robust Financials Driving The Recent Rally In Erie Indemnity Company's (NASDAQ:ERIE) Stock?
Are Robust Financials Driving The Recent Rally In Erie Indemnity Company's (NASDAQ:ERIE) Stock?
Erie Indemnity's (NASDAQ:ERIE) stock is up by a considerable 26% over the past month. Since the market usually pay for a company's long-term fundamentals, we decided to study the company's key performance indicators to see if they could be influencing the market. In this article, we decided to focus on Erie Indemnity's ROE.
在过去的一个月里,伊瑞保险(纳斯达克:ERIE)的股票上涨了26%。由于市场通常支付公司的长期基本面,因此我们决定研究公司的关键绩效指标,以判断它们是否会影响市场。在本文中,我们决定关注伊瑞保险的roe。
Return on equity or ROE is a key measure used to assess how efficiently a company's management is utilizing the company's capital. In other words, it is a profitability ratio which measures the rate of return on the capital provided by the company's shareholders.
净资产收益率(roe)是衡量公司经营管理层如何有效利用公司资本的关键指标。换言之,它是一种利润率,衡量由公司股东提供的资本的回报率。
How Is ROE Calculated?
净资产收益率怎么计算?
ROE can be calculated by using the formula:
净资产收益率可以使用以下公式进行计算:
Return on Equity = Net Profit (from continuing operations) ÷ Shareholders' Equity
净资产收益率 = 净利润(从持续经营中获得)÷ 股东权益
So, based on the above formula, the ROE for Erie Indemnity is:
因此,根据以上公式,伊瑞保险的roe为:
29% = US$530m ÷ US$1.8b (Based on the trailing twelve months to June 2024).
29% = 53000万美元 ÷ 18亿美元(根据截至2024年6月的过去十二个月计算)。
The 'return' is the yearly profit. That means that for every $1 worth of shareholders' equity, the company generated $0.29 in profit.
“回报”是每年的利润。这意味着公司每1美元股东权益的价值,能带来0.29美元的利润。
What Is The Relationship Between ROE And Earnings Growth?
ROE与盈利增长之间的关系是什么?
So far, we've learned that ROE is a measure of a company's profitability. We now need to evaluate how much profit the company reinvests or "retains" for future growth which then gives us an idea about the growth potential of the company. Generally speaking, other things being equal, firms with a high return on equity and profit retention, have a higher growth rate than firms that don't share these attributes.
到目前为止,我们已经知道roe是衡量公司盈利能力的一种方法。现在我们需要评估公司重新投资或“保留”的利润有多少,以此来了解公司的增长潜力。一般来说,其他因素相同的情况下,roe和利润保留都较高的公司比不具备这些属性的公司具有更高的增长率。
Erie Indemnity's Earnings Growth And 29% ROE
伊瑞保险的盈利增长和29%的roe
To begin with, Erie Indemnity has a pretty high ROE which is interesting. Additionally, the company's ROE is higher compared to the industry average of 13% which is quite remarkable. This likely paved the way for the modest 9.1% net income growth seen by Erie Indemnity over the past five years.
首先,伊瑞保险的roe相当高,这很有趣。此外,公司的roe比13%的行业平均水平要高得多,这是非常显著的。这可能为伊瑞保险在过去五年中实现的适度9.1%的净利润增长铺平了道路。
Next, on comparing Erie Indemnity's net income growth with the industry, we found that the company's reported growth is similar to the industry average growth rate of 10% over the last few years.
其次,将伊瑞保险的净利润增长与行业进行比较,我们发现公司报告的增长与近几年的10%的行业平均增长率相似。
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Earnings growth is an important metric to consider when valuing a stock. It's important for an investor to know whether the market has priced in the company's expected earnings growth (or decline). This then helps them determine if the stock is placed for a bright or bleak future. One good indicator of expected earnings growth is the P/E ratio which determines the price the market is willing to pay for a stock based on its earnings prospects. So, you may want to check if Erie Indemnity is trading on a high P/E or a low P/E, relative to its industry.
盈利增长是考虑股票估值时需要考虑的重要指标。投资者了解市场是否已经对公司预期的盈利增长(或下降)进行了定价,对于他们判断股票未来的发展情况非常重要。预期盈利增长的一个很好的指标是市盈率,它确定了市场根据公司的盈利前景愿意支付的股票价格。因此,您可能需要检查伊瑞保险的市盈率相对于其行业是高还是低。
Is Erie Indemnity Using Its Retained Earnings Effectively?
伊瑞保险是否有效利用其留存收益?
While Erie Indemnity has a three-year median payout ratio of 67% (which means it retains 33% of profits), the company has still seen a fair bit of earnings growth in the past, meaning that its high payout ratio hasn't hampered its ability to grow.
虽然伊瑞保险三年的中位数派息比率为67%(这意味着公司保留了33%的利润),但过去公司仍然看到了相当大的盈利增长,这意味着其高派息比率并没有妨碍其发展能力。
Besides, Erie Indemnity has been paying dividends for at least ten years or more. This shows that the company is committed to sharing profits with its shareholders.
此外,伊瑞保险已经连续十年或更长时间派发股息。这表明公司致力于与股东分享利润。
Conclusion
结论
In total, we are pretty happy with Erie Indemnity's performance. In particular, its high ROE is quite noteworthy and also the probable explanation behind its considerable earnings growth. Yet, the company is retaining a small portion of its profits. Which means that the company has been able to grow its earnings in spite of it, so that's not too bad. Having said that, looking at the current analyst estimates, we found that the company's earnings are expected to gain momentum. To know more about the latest analysts predictions for the company, check out this visualization of analyst forecasts for the company.
总的来说,我们对伊瑞保险的表现非常满意。特别是它的高roe非常值得注意,也是其可观的盈利增长的可能原因。但是,该公司仍保留了一小部分利润,这意味着该公司能够在不影响发展的情况下增加盈利。虽然如此,我们查看了当前分析师的预估,发现公司的盈利预期在不断提高。有关该公司的最新分析师预测的更多信息,请查看此可视化分析师预测的链接。
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