Should You Add Old Republic Stock for Better Returns?

Old Republic International Corporation‘s ORI solid market presence, niche focus, low property catastrophe exposure in its General Insurance segment and strong capital position make it worth adding to one’s portfolio.

Optimistic Growth Projections

The Zacks Consensus Estimate for Old Republic’s 2024 earnings per share indicates a year-over-year increase of 3.8%. The consensus estimate for revenues is pegged at $7.96 billion, implying a year-over-year improvement of 6.8%.
The consensus estimate for 2025 earnings per share and revenues indicates an increase of 4.4% and 4%, respectively, from the corresponding 2024 estimates.
Earnings have grown 10.3% in the past five years, better than the industry average of 9.2%

Earnings Surprise History

Old Republic has a solid record of beating earnings estimates in three of the last four quarters while missing in one, the average being 6.61%.

Zacks Rank & Price Performance

ORI currently carries a Zacks Rank #2 (Buy). In the past year, the stock has gained 23.1%, outperforming the industry’s growth of 19.6%.

Style Score

Old Republic has a VGM Score of B. The VGM Score helps identify stocks with the most attractive value, best growth and the most promising momentum.
Back-tested results have shown that stocks with a VGM Score of A or B combined with a Zacks Rank #1 (Strong Buy) or 2 offer better returns.

Attractive Valuation

ORI shares are trading at a price-to-book multiple of 1.30, lower than the industry average of 2.53. The company has a Value Score of B. This style score helps find the most attractive value stocks.

Business Tailwinds

ORI’s General Insurance segment should continue to benefit from segmentation, better risk selection, meticulous pricing and increased use of analytics. This, in turn, has helped deliver a combined ratio below 96 for 14 years. The insurer aims combined ratio between 90 and 95.
The Title business, on the other hand, should continue to benefit from an expanding presence in the commercial real estate market.
Banking on operational strength, this third-largest title insurer in the country distributes wealth to its shareholders in the form of dividends and share repurchases. ORI has an impressive dividend history banking on operational excellence. It has increased dividends for 43 straight years. It has been paying dividends for the last 83 years, besides paying special dividends occasionally, making it an attractive pick for yield-seeking investors. Its board recently approved a $1.1 billion share buyback program.
Old Republic International is one of the 111 companies that have posted at least 28 consecutive years of annual dividend growth. The insurer has returned 12.6% per share for the last 10 years to shareholders.
Return on invested capital in the trailing 12 months was 5.9%, better than the industry average of 2%, reflecting ORI’s efficiency in utilizing funds to generate income.

Other Stocks to Consider

Some other top-ranked stocks from the multi-line insurance industry are Lemonade, Inc. LMND, EverQuote, Inc. EVER and Radian Group Inc. RDN, each carrying a Zacks Rank #2 at present.
Lemonade has a solid track record of beating earnings estimates in each of the trailing four quarters, the average being 12.82%. Shares of LMND have plunged 22.2% in the past year.
The Zacks Consensus Estimate for LMND’s 2024 and 2025 earnings implies year-over-year growth of 13.5% and 18.3%, respectively.
EverQuote’s earnings beat estimates in each of the trailing four quarters, delivering an average surprise of 65.16%. Shares of EVER have skyrocketed 171.8% in the past year.
The Zacks Consensus Estimate for EverQuote’s 2024 and 2025 earnings per share indicates a year-over-year increase of 102.6% and 362.50%, respectively.
Radian has a solid track record of beating earnings estimates in each of the trailing four quarters, the average being 22.79%. Shares of RDN have climbed 17% in the past year.
The Zacks Consensus Estimate for RDN’s 2024 and 2025 revenues implies year-over-year growth of 8.2% and 4.9%, respectively.

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