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Here's Why Investors Should Hold Old Republic (ORI) Stock

Old Republic International Corporation’s ORI improved risk selection, pricing precision, solid underwriting results and prudent capital deployment make it worth retaining in one’s portfolio.

Earnings Surprise History

Old Republic International has a decent earnings surprise history. It beat estimates in three of the last four quarters and missed in one, with the average being 12.06%.

Return on Equity (ROE)

Old Republic International’s ROE for the trailing 12 months is 13.6%, better than the industry average of 8.3%, reflecting the company’s efficiency in utilizing shareholders’ funds.

Zacks Rank & Price Performance

Old Republic International currently carries a Zacks Rank #3 (Hold). In the past year, the stock has lost 0.7%, against the industry’s growth of 5.2%.

Zacks Investment Research
Zacks Investment Research


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Style Score

Old Republic International has a favorable VGM Score of A. VGM Score helps identify stocks with the most attractive value, best growth and the most promising momentum.

Business Tailwinds

The General Insurance segment should continue to benefit from better segmentation, improved risk selection, pricing precision and increased use of analytics. Strong premium rate increases for most lines of coverage and new business production as well as rising premiums in commercial auto, financial indemnity and property coverages should benefit the premium growth of this segment.

The Title insurance business will likely  to benefit from expanding presence in the commercial real estate market and increased digitalization apart from organic growth and prudent acquisitions.

Solid underwriting results should improve the consolidated combined ratios. The title insurer targets a combined ratio in the range of 90-95% in the General Insurance segment. The insurer has maintained the combined ratio below 100 in 14 of the last 15 years.

Old Republic International boasts a robust balance sheet with an improving cash balance and low leverage ratio.

ORI has an impressive dividend history, banking on a solid capital position. The third-largest title insurer in the country increased dividends for 41 straight years and paid out dividends for the last 81 years, besides paying special dividends occasionally. Its dividend yield of 3.8% betters the industry average of 2.2%, making it an attractive pick for yield-seeking investors.

Recently, the board of directors approved a special, one-time cash dividend of $1 per share. Old Republic boasts of being one of the 111 companies that have posted at least 25 consecutive years of annual dividend growth. Since Dec 31, 2016, the board has declared regular and special cash dividends of nearly $3 billion. At present, it has $225.8 remaining under the current repurchase authorization.

Stocks to Consider

Some better ranked stocks from the multi-line insurance industry are MGIC Investment Corporation MTG, Radian Group Inc. RDN and Allianz SE ALIZY, each carrying a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

MGIC Investment’s earnings surpassed estimates in each of the last four quarters, the average being 36.34%. In the past year, MGIC Investment has lost 6.4%.

The Zacks Consensus Estimate for MTG’s 2022 and 2023 earnings has moved 12.1% and 0.4% north, respectively, in the past 30 days.

Radian Group’s earnings surpassed estimates in each of the last four quarters, the average earnings surprise being 45.10%.

The Zacks Consensus Estimate for RDN’s 2022 earnings has moved 12.7% north in the past 30 days. In the past year, the insurer has lost 9.3%.

Allianz’s earnings surpassed estimates in each of the last four quarters, the average earnings surprise being 12.96%. In the past year, the insurer has lost 6.9%.

The Zacks Consensus Estimate for ALIZY’s 2022 and 2023 earnings has moved 4.4% and 3.8% north, respectively, in the past 30 days.

Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report

MGIC Investment Corporation (MTG) : Free Stock Analysis Report

Radian Group Inc. (RDN) : Free Stock Analysis Report

Old Republic International Corporation (ORI) : Free Stock Analysis Report

Allianz SE (ALIZY) : Free Stock Analysis Report

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