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Reasons Why Old Republic (ORI) Stock is a Solid Pick Now
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Old Republic International Corporation (ORI - Free Report) has been in investors’ good books owing to improved risk selection, pricing precision, solid underwriting results and prudent capital deployment.
Optimistic Growth Projections
The Zacks Consensus Estimate for ORI’s 2024 earnings is pegged at $2.35, indicating a 6.8% increase from the year-ago reported figure on 1.7% higher revenues of $7.82 billion.
Earnings Surprise History
Old Republic International has a decent earnings surprise history. ORI has a solid track record of beating earnings estimates in six of the last seven quarters.
Return on Equity (ROE)
Old Republic International’s ROE for the trailing 12 months is 13.5%, better than the industry average of 8.8%, reflecting the company’s efficiency in utilizing shareholders’ funds.
Zacks Rank & Price Performance
Old Republic International currently flaunts a Zacks Rank #1 (Strong Buy). In the past year, the stock has lost 9.7% compared with the industry’s decrease of 22.3%.
Image Source: Zacks Investment Research
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 benefit from expanding its 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 4.1% betters the industry average of 2.7%, making it an attractive pick for yield-seeking investors.
In August 2022, the board of directors approved a special, one-time cash dividend of $1 per share as well as a $450 million share buyback program. Old Republic boasts of being one of the 111 companies that have posted at least 25 consecutive years of annual dividend growth.
Old Republic International has an impressive Value Score of B, reflecting an attractive valuation of the stock. The insurer currently has a trailing 12-month P/B ratio of 1.17, lower than the industry range of 2.44.
Back-tested results show that stocks with a Value Score of A or B when combined with a Zacks Rank #1 or 2 (Buy) offer the best opportunities in the value investing space.
Axis Capital beat estimates in three of the last four quarters and missed in one, the average being 5.70%. The Zacks Consensus Estimate for 2023 and 2024 has moved 5% and 0.3%, north, respectively, in the past 60 days.
The Zacks Consensus Estimate for AXS’ 2023 and 2024 earnings per share is pegged at $7.50 and $8.50, indicating a year-over-year increase of 29% and 13.3%, respectively. In the past year, AXS has lost 10%.
Everest Re beat estimates in each of the last four quarters, the average being 18.41%.
The Zacks Consensus Estimate for RE’s 2023 and 2024 earnings per share is pegged at $45.63 and $53.02, indicating a year-over-year increase of 68.5% and 16.1%, respectively. In the past year, RE has gained 14.3%.
Kinsale Capital has a solid track record of beating earnings estimates in each of the last four quarters, the average being 13.83%. In the past year, KNSL has gained 22.9%.
The Zacks Consensus Estimate for KNSL’s 2023 and 2024 earnings per share is pegged at $9.86 and $11.85, indicating a year-over-year increase of 26.4% and 20.2%, respectively.
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Reasons Why Old Republic (ORI) Stock is a Solid Pick Now
Old Republic International Corporation (ORI - Free Report) has been in investors’ good books owing to improved risk selection, pricing precision, solid underwriting results and prudent capital deployment.
Optimistic Growth Projections
The Zacks Consensus Estimate for ORI’s 2024 earnings is pegged at $2.35, indicating a 6.8% increase from the year-ago reported figure on 1.7% higher revenues of $7.82 billion.
Earnings Surprise History
Old Republic International has a decent earnings surprise history. ORI has a solid track record of beating earnings estimates in six of the last seven quarters.
Return on Equity (ROE)
Old Republic International’s ROE for the trailing 12 months is 13.5%, better than the industry average of 8.8%, reflecting the company’s efficiency in utilizing shareholders’ funds.
Zacks Rank & Price Performance
Old Republic International currently flaunts a Zacks Rank #1 (Strong Buy). In the past year, the stock has lost 9.7% compared with the industry’s decrease of 22.3%.
Image Source: Zacks Investment Research
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 benefit from expanding its 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 4.1% betters the industry average of 2.7%, making it an attractive pick for yield-seeking investors.
In August 2022, the board of directors approved a special, one-time cash dividend of $1 per share as well as a $450 million share buyback program. Old Republic boasts of being one of the 111 companies that have posted at least 25 consecutive years of annual dividend growth.
Old Republic International has an impressive Value Score of B, reflecting an attractive valuation of the stock. The insurer currently has a trailing 12-month P/B ratio of 1.17, lower than the industry range of 2.44.
Back-tested results show that stocks with a Value Score of A or B when combined with a Zacks Rank #1 or 2 (Buy) offer the best opportunities in the value investing space.
Stocks to Consider
Some other top-ranked stocks from the property and casualty insurance industry are Axis Capital Holdings Limited (AXS - Free Report) , Everest Re Group, Ltd. and Kinsale Capital Group, Inc. (KNSL - Free Report) , each sporting a Zacks Rank #1 at present. You can see the complete list of today’s Zacks #1 Rank stocks here.
Axis Capital beat estimates in three of the last four quarters and missed in one, the average being 5.70%. The Zacks Consensus Estimate for 2023 and 2024 has moved 5% and 0.3%, north, respectively, in the past 60 days.
The Zacks Consensus Estimate for AXS’ 2023 and 2024 earnings per share is pegged at $7.50 and $8.50, indicating a year-over-year increase of 29% and 13.3%, respectively. In the past year, AXS has lost 10%.
Everest Re beat estimates in each of the last four quarters, the average being 18.41%.
The Zacks Consensus Estimate for RE’s 2023 and 2024 earnings per share is pegged at $45.63 and $53.02, indicating a year-over-year increase of 68.5% and 16.1%, respectively. In the past year, RE has gained 14.3%.
Kinsale Capital has a solid track record of beating earnings estimates in each of the last four quarters, the average being 13.83%. In the past year, KNSL has gained 22.9%.
The Zacks Consensus Estimate for KNSL’s 2023 and 2024 earnings per share is pegged at $9.86 and $11.85, indicating a year-over-year increase of 26.4% and 20.2%, respectively.