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Old Republic International Corporation Message Board

  • naplesshareholder naplesshareholder Nov 25, 2011 7:26 AM Flag

    Will ORI Cut Dividend?

    Does anyone have any thoughts on when ORI will cut their dividend to preserve their cash while they are losing millions?

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    • Good question. I don't think they will, but it's obviously on everyone's minds.

      I have been adding to my position aggresively. I didn't do so based on the dividend. If they cut it and issue more equity, I think the stock price could have a quick knee jerk selloff, and then rise above the current price. That's what happened to REITs who did that in 2008-2009.

      At 7.20 it's too cheap, dividend or no dividend. The company has a solid core business and the mortgage insurance division is in runoff - the problem is being eliminated.

      • 2 Replies to ou71764
      • two questions: (1) regarding the MI unit in the runoff mode, is the rest of the company insulated from MI's loss? i think there's a firewall but do not know how that works. (2) without its traditionally profitable MI business, how much will the rest of the company worth? you apparently think the current valuation is that of the "rest". educate me? i am genuinely interested in buying into the insurance industry... thank you

      • The company's management is very proud of its dividend-raising record.

        More to the point: inferring from the proxy statement, Aldo gets half his money from the dividends. He doesn't seem like the kind of guy who willingly takes a pay cut.

        And he's been paying cash money to buy shares on the open market. Quite recently.

        Not the behavior of someone who knows he's about to issue some bad news.

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