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Here's Why You Should Stay Invested in Old Republic (ORI)

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·3 min read
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Old Republic International Corporation ORI is poised for growth on solid market presence, niche focus, low property catastrophe exposure in its General Insurance segment and robust capital position. These factors make Old Republic stock worth retaining in one’s portfolio.

ORI has a decent track record of beating earnings estimates in the trailing four quarters.

ORI has a VGM Score of B.

Zacks Rank & Price Performance

Old Republic currently carries a Zacks Rank #3 (Hold). The stock has gained 2.8% in a year’s time, against the industry’s decline of 6.8%.

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Zacks Investment Research


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Return on Equity

Return on equity in the trailing 12 months was 14.2%, better than the industry average of 9.6%. This reflects ORI’s unique combination of specialty property and casualty and Title franchises that offers diversification.

Optimistic Growth Projections

The Zacks Consensus Estimate for ORI’s 2023 earnings is pegged at $2.85, indicating an improvement of 1.8% from the year-ago reported figure.

Business Tailwinds

The General Insurance segment is likely to continue benefiting from better segmentation, improved risk selection, pricing precision and increased use of analytics. ORI intends to improve revenues by intensifying its focus on organic growth, new ventures, strategic buyouts, new product offerings and new distribution channels.

This segment delivered a combined ratio below 100 in 14 of the last 15 years. Thus, ORI aims for a combined ratio between 90 and 95 and an expense ratio below 25.

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

Improving cash balance and low leverage ratio have been aiding the third-largest title insurer in the country to strengthen its balance sheet.

Solid Dividend History

Riding on a solid capital position, ORI increased dividends for 40 straight years and paid out dividends for the last 80 years besides paying special dividends occasionally. Its dividend yield of 3.6% betters the industry average of 2%, making it an attractive pick for yield-seeking investors. Old Republic boasts of being one of the 111 companies that have posted at least 25 consecutive years of annual dividend growth.

Stocks to Consider

Some better-ranked stocks from the insurance industry are United Fire Group UFCS, Cincinnati Financial Corporation CINF and Fidelity National Financial FNF. While United Fire and Cincinnati Financial sport a Zacks Rank #1 (Strong Buy), Fidelity National carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

The Zacks Consensus Estimate for UFCS’ 2022 and 2023 earnings indicates a respective year-over-year increase of 18.3% and 15%. United Fire Group has a trailing four-quarter earnings surprise of 275.45%, on average.

The Zacks Consensus Estimate for CINF’s 2022 and 2023 earnings has moved 5.7% and 5.5% north, respectively, in the past 60 days. Cincinnati Financial has a trailing four-quarter earnings surprise of 38.48%, on average.

The Zacks Consensus Estimate for FNF’s 2022 earnings has moved 3.3% north in the past seven days. Fidelity National has a trailing four-quarter earnings surprise of 31.73%, on average.

Shares of UFCS and CINF have gained 32.4% and 18.6%, respectively, year to date, while FNF stock has lost 12.7% in the same time frame.


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

Cincinnati Financial Corporation (CINF) : Free Stock Analysis Report

Fidelity National Financial, Inc. (FNF) : Free Stock Analysis Report

United Fire Group, Inc (UFCS) : Free Stock Analysis Report

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

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