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Old Republic International Corporation Message Board

  • wlinvest1 wlinvest1 Jan 12, 2007 1:03 AM Flag

    Better Company- Better Dividend

    Mr, OU71764, I assume that you work for OR and they have brainwashed you to keep buying their stock through the 401-K program or possibly an ESPP. Either way, you are missing out on a better return and dividend yield.

    You are not married to OR and that investment psychology should be the same for any stock you buy.

    OR has a $0.60 dividend, 2.60% yield. The stock has traded between $20.08 and $23.74 the past 52 weeks. That is about as exciting as watching paint dry.

    There is another more exciting stock and more PROFITABLE within your own industry that I would recommend you check out. FNF (Fidelity Title), yes your competitor, has a $1.20 dividend and a 5.10% yield. You can't argue with the numbers. In addition to the fat dividend, the stock has appreciated much more than OR in 2006 and recently increased their dividend. They aslo had a recent TAX FREE share distribution to all shareholders of their spin off company FIS (Fidelity Info Systems). Hands down, you would have made more $$$$ owning FNF.

    It's your money and retirement savings so why give up any appreciation of high dividend yields just because you work at OR or know someone who does. I don't work at FNF but I own stock in FNF, STC and FAF. I don't own OR because it is not as good an investment as FNF.

    I would suggest you try to see the forest through the trees and go with the company that will make you and your family more money. Bill Foley of FNF is a very shareholder friendly CEO. I think you would agree just from the dividend yield alone.

    Don't be a victim of your own company bias and short change yourself. FNF is a better run company, they are the largest title insurer, they are the MOST PROFITABLE title insurer, and have the highest dividend yield too.

    You could still invest in OR through your company plans especially if they match a % of your principle, but FNF would still be a better bet inside and outside of your company plans.

    Remember, you need to watch out for you. OR does not have your best interest before their own.

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    • I don't check this m.b. every day...didn't know we had a hornets nest stirred up. Unusual for a stodgy insurance stock.

      Archman made a nice rebuttal. But sure, why not, I'll add whatever I can, too.

      First of all, I'm not an ORI employee either. Financial stocks are the largest percentage of my dividend-oriented portfolio. I own a lot of insurance and bank stocks. I'm very high on all of them as long-term investments because they all have a long history of paying a dividend and increasing it annually.

      Insurance companies are big cash-generating machines. Managing risk is their business. So it's no wonder that I ended up owning a lot insurance companies when I was looking for consistent dividend-paying stocks. Banks, too.

      But it's more than just the current yield. The formula I use is to add the dividend yield to the rate of dividend growth. It's the combination of the two that will determine your long term return.

      ORI has a long history of not only increasing their dividend annually, but at a double digit rate. As do the other stocks I own.

      I have nothing against FNF. I never mentioned it before that I can recall. The only reason I mention it now is that you did! It could do very well. It definitely has an above average yield. So it's attractive on that basis.

      But FNF's dividend growth rate hasn't been established, not to my satisfaction anyway. Their last increase was 3.4%. So the combination for FNF (current yield plus rate of dividend increase) is in the single digits. I only buy stocks where that number is at least 12%. I prefer 15% or higher.

      If you want a stock to get excited about, try JNJ. Still has an above average dividend -- but even better, it has a long track record of increasing it at a double digit rate. And given their business, I see no reason why that should change in the next 25 years.

      Or one of my other favorites, Procter and Gamble. PG has paid a dividend every year since the 1890's. They've increased it every year since 1956. Wanna make a bet if JNJ and PG increase their dividend in 2007, 2008, 2009, and 2010? And their increases are likely to be at a double digit rate, or close to it.

      Or banks. A lot of them are paying 4% yields and have a very high dividend growth rate. Bank of America, for one. I own more bank stocks than insurance stocks.

      I've never touted ORI other than as a get-rich-slow type of investment. In fact, my post that set you off was that it's likely to stay under-valued. That's not a tout. It's the opposite -- a warning that it isn't going to appeal to short term investors.

      I have said, and continue to say so, that for patient, long-term investors, especially those who reinvest the dividends and buy on dips, ORI can make you a lot of money. But I also say it about JNJ, PG, BAC, SYY, MI, UL, and the other 20 or so dividend stocks that I own.

      On top of that, ORI paid a special dividend in 2 recent years that surpassed its regular dividend. It has a low PE. Long-term, I do think it's a great stock...but it's not going to make anyone rich overnight. Or even in 5 years.

      If anything I'd like to see a short term sell-off in some of these stocks so I can add to them at a better price.

      ou

    • u sure post a lot on the fnf board!

 
ORI
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