Berkshire Hathaway (NYSE: BRK-B) and Erie Indemnity (NASDAQ:ERIE) are both financials companies, but which is the better investment? We will contrast the two businesses based on the strength of their risk, valuation, analyst recommendations, institutional ownership, earnings, profitability and dividends.

Dividends

Erie Indemnity pays an annual dividend of $3.13 per share and has a dividend yield of 2.5%. Berkshire Hathaway does not pay a dividend. Erie Indemnity pays out 78.4% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Erie Indemnity has increased its dividend for 21 consecutive years.

Earnings and Valuation

This table compares Berkshire Hathaway and Erie Indemnity’s top-line revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
Berkshire Hathaway $232.80 billion 0.00 $43.46 billion N/A N/A
Erie Indemnity $1.65 billion 3.92 $303.02 million $3.99 31.02

Berkshire Hathaway has higher revenue and earnings than Erie Indemnity.

Profitability

This table compares Berkshire Hathaway and Erie Indemnity’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Berkshire Hathaway 7.57% 5.76% 2.65%
Erie Indemnity 12.73% 25.11% 13.76%

Institutional and Insider Ownership

31.0% of Erie Indemnity shares are owned by institutional investors. 46.8% of Erie Indemnity shares are owned by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a stock is poised for long-term growth.

Analyst Ratings

This is a summary of recent recommendations for Berkshire Hathaway and Erie Indemnity, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Berkshire Hathaway 0 0 0 0 N/A
Erie Indemnity 0 0 0 0 N/A

Summary

Erie Indemnity beats Berkshire Hathaway on 9 of the 12 factors compared between the two stocks.

About Berkshire Hathaway

Berkshire Hathaway Inc. is a holding company owning subsidiaries engaged in various business activities. Its segments include Insurance, such as GEICO, Berkshire Hathaway Primary Group, General Re Corporation and Berkshire Hathaway Reinsurance Group; Burlington Northern Santa Fe, LLC, which is engaged in the operation of the railroad system; Berkshire Hathaway Energy, which includes regulated electric and gas utility; Manufacturing, which includes manufacturers of various products, including industrial, consumer and building products; McLane Company, which is engaged in the wholesale distribution of groceries and non-food items; Service and retailing, which includes providers of various services, including fractional aircraft ownership programs, aviation pilot training and various retailing businesses, and Finance and financial products, which includes manufactured housing and related consumer financing, transportation equipment, manufacturing and leasing, and furniture leasing.

About Erie Indemnity

Erie Indemnity Company is a management company. The Company serves as the attorney-in-fact for the subscribers (policyholders) at the Erie Insurance Exchange (Exchange). The Exchange is a reciprocal insurer that writes property and casualty insurance. The Company’s function is to perform certain services for the Exchange relating to the sales, underwriting and issuance of policies on behalf of the Exchange. The sales related services the Company provides include agent compensation, and certain sales and advertising support services. Agent compensation includes scheduled commissions to agents based upon premiums written, as well as additional commissions and bonuses to agents. The underwriting services the Company provides include underwriting and policy processing expenses. It provides information technology services that supports various functions. The remaining services the Company provides include customer service and administrative costs.

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