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Old Republic International Corporation Message Board

  • ori.investor ori.investor Jun 5, 2013 9:37 PM Flag

    Throwing the baby out with the bath water

    Cramer was on tonight saying it's too early to buy dividend paying stocks. I wonder if it will be as good advice as he gave when gold was $1,800 per ounce and he said to put up to 20% into it LONG TERM for diversification. WHEN has gold ever been a good long term investment?! But it's too early to buy ORI with a 5.5% yield that's secure and rising. We'll see.

    People don't get it with ORI. The dividend is secure. It was fully covered at the depth of the financial crisis with 2 of their 3 major divisions directly tied to real estate and bleeding red ink like nothing the company had ever seen before. Yet their general insurance division easily covered the dividend.

    So the stock pays 5.5% now. The increases will start accelerating within a couple of years. The dividend is .72 now. By 2018 I predict that it will be over 1.00 and the stock will be at least $10 per share higher. Assuming it isn't bought out at $18-$19 first.

    I added at 12.99 today - couldn't believe we were back to the 12's. Who knows, maybe we'll approach the 6% yield level again ($12 per share). I don't know where the bottom is. But I wouldn't bet on it. The obsession with the Fed and rising rates is trader groupthink, and you can bet that when the traders start showing up on CNBC to tell you to bail out, that at least some of them have their buy orders in place.

    Stocks are not bonds. Go look at the long term historic dividend yield when there was a normal interest rate environment. I know ORI doesn't normally yield 5.5% when its prospects are moving higher and interest rates are "normal." It's a gift. I'm locking in ORI long-term - if only I had bought $1,800 gold for long term diversification, LOL!

    Sentiment: Strong Buy

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18.27-0.06(-0.33%)Oct 21 4:02 PMEDT