Here's What We Like About Old Republic International's (NYSE:ORI) Upcoming Dividend
Simply Wall St
Fri, September 10, 2021, 7:24 AM·3 min read
Old Republic International Corporation (NYSE:ORI) is about to trade ex-dividend in the next 3 days. Typically, the ex-dividend date is one business day before the record date which is the date on which a company determines the shareholders eligible to receive a dividend. The ex-dividend date is of consequence because whenever a stock is bought or sold, the trade takes at least two business day to settle. Accordingly, Old Republic International investors that purchase the stock on or after the 14th of September will not receive the dividend, which will be paid on the 6th of October.
The company's next dividend payment will be US$1.50 per share, on the back of last year when the company paid a total of US$2.38 to shareholders. Calculating the last year's worth of payments shows that Old Republic International has a trailing yield of 9.4% on the current share price of $25.36. If you buy this business for its dividend, you should have an idea of whether Old Republic International's dividend is reliable and sustainable. As a result, readers should always check whether Old Republic International has been able to grow its dividends, or if the dividend might be cut.
Check out our latest analysis for Old Republic International
Dividends are typically paid from company earnings. If a company pays more in dividends than it earned in profit, then the dividend could be unsustainable. Old Republic International has a low and conservative payout ratio of just 16% of its income after tax.
When a company paid out less in dividends than it earned in profit, this generally suggests its dividend is affordable. The lower the % of its profit that it pays out, the greater the margin of safety for the dividend if the business enters a downturn.
Click here to see the company's payout ratio, plus analyst estimates of its future dividends.
Have Earnings And Dividends Been Growing?
Businesses with strong growth prospects usually make the best dividend payers, because it's easier to grow dividends when earnings per share are improving. If business enters a downturn and the dividend is cut, the company could see its value fall precipitously. That's why it's comforting to see Old Republic International's earnings have been skyrocketing, up 27% per annum for the past five years.
Another key way to measure a company's dividend prospects is by measuring its historical rate of dividend growth. Old Republic International has delivered 13% dividend growth per year on average over the past 10 years. It's great to see earnings per share growing rapidly over several years, and dividends per share growing right along with it.
Is Old Republic International an attractive dividend stock, or better left on the shelf? Typically, companies that are growing rapidly and paying out a low fraction of earnings are keeping the profits for reinvestment in the business. This strategy can add significant value to shareholders over the long term - as long as it's done without issuing too many new shares. Overall, Old Republic International looks like a promising dividend stock in this analysis, and we think it would be worth investigating further.
In light of that, while Old Republic International has an appealing dividend, it's worth knowing the risks involved with this stock. Every company has risks, and we've spotted 1 warning sign for Old Republic International you should know about.
A common investment mistake is buying the first interesting stock you see. Here you can find a list of promising dividend stocks with a greater than 2% yield and an upcoming dividend.
This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.
Old Republic EPS beats by $0.21, beats on revenue • 9:03 AM
Old Republic (NYSE:ORI): Q2 Non-GAAP EPS of $0.73 beats by $0.21; GAAP EPS of $1.05 beats by $0.55.
Revenue of $2.13B (+26.8% Y/Y) beats by $420M.
Solid underwriting results produced consolidated combined ratios of 90.6% for the second quarter and 90.8% for the first six months of 2021, compared to 96.1% and 95.6% in the comparative 2020 periods.
Good news - Old Republic Announces Stock Purchase By Its ESSOP
Thu March 12, 2020 1:00 PM|PR Newswire|About: ORI
CHICAGO, March 12, 2020 /PRNewswire/ -- Old Republic International Corporation (ORI) today reported that its Employees Savings & Stock Ownership Plan ("ESSOP") planned to acquire up to 3,000,000 Old Republic common shares in open-market purchases, as market conditions may warrant. As of December 31, 2019 the ESSOP held approximately 15.3 million ORI common shares or approximately 5.1% of all shares then outstanding. Assuming all 3.0 million shares are ultimately acquired, the ESSOP would own approximately 18.3 million ORI common shares or approximately 6.1% of all currently outstanding common shares.
About Old Republic
Chicago-based Old Republic International Corporation is one of the nation's 50 largest publicly held insurance enterprises. It is a member of the Fortune 500 listing of America's largest companies. The Company is organized as an insurance holding company whose subsidiaries actively market, underwrite, and provide risk management services for a wide variety of coverages mostly in the general and title insurance fields. A long-term interest in mortgage guaranty and consumer credit indemnity coverages has devolved to a run-off operating mode since 2012. Old Republic's general insurance business ranks among the nation's 50 largest, while its title insurance operations are the third largest in its industry.
The nature of Old Republic's business requires that it be managed for the long run, and its cash dividend policy reflects that long-term orientation. The current annualized dividend rate of $0.84 per share marks the 39th consecutive year that Old Republic has boosted this rate, and 2020 becomes the 79th year of uninterrupted regular cash dividend payments. Here's a summary of recent years' total book and market returns, which includes the addition and reinvestment of cash dividend payments, in comparison with the financial performance of three selected indices similarly developed.
Old Republic International Remains The Conservative Choice For Income
Oct. 30, 2019 12:26 PM ET
To read the article with all of the charts and graphs, click on this link:
*There has been a number of senior appointments made over the past year at Old Republic International.
* The fundamentally conservative nature of this stock remains unaffected, however.
* It is undervalued at this time.
Old Republic International (ORI) had some changes made to its senior personnel, but what has not changed is that this insurance stalwart remains a steady and dependable income investment. Whether it is a buy or not at present will be addressed below.
In terms of new appointments, there has been a slew of news on that front. On 05/09/2019, Old Republic announced that Craig R. Smiddy, at that time President and COO of Old Republic International, would become President and CEO with effect from 10/01/2019.
The big shake-up was announced on 08/21/2019 when Stephen J. Oberst was promoted from President and CEO of the Risk Management Underwriting division to Executive Vice President, Terri E. Minik was named as Oberst's successor as President of Risk Management Underwriting while retaining her position as COO of that division.
Both Oberst and Minik will also serve in the CEO's senior policy-making office and will be joined by the company's Senior Vice-President and Treasurer W. Todd Gray in that department. All three assumed their roles with effect from 10/01/2019.
The final major appointment was announced on 09/23/2019 when it was reported that Aaron Jacoby would assume the role of Senior Vice-President of the Corporate Development and Finance department and would do so with effect from 10/10/2019.
Now, five appointments within one calendar year would at first glance suggest a fundamental shake-up in how Old Republic International operates is forthcoming. This was squashed right away by the firm's Chairman and CEO Al Zucaro, who stated on 09/23/2019 (when the appointments of Oberst, Minik, and Gray were announced) that the reasoning behind these appointments was the following:
"...they represent a continuing fulfillment of the Company's executive succession plans. They augur well for the continuity of long-established governance and operating practices, and for an orderly transition of executive responsibilities."
In short, the appointments were made to ensure that Old Republic International stayed on the same steady, conservative path that this insurance underwriter has charted hitherto, and it's foolish to argue against that this is the correct choice when confronted with the revenue and net income figures reported over the past five years...
Conservatism has been the hallmark of Old Republic International's success, and this approach extends to its balance sheet. With a net worth of $5.79 billion against long-term debt of $973.7 million, it is not fanciful to state that Old Republic International will be able to continue rewarding shareholders with consecutively rising dividends as they have for the last 37 years - a record that makes it a de-facto Dividend Aristocrat. The payout ratio of 30.20% makes that more likely still.
The likelihood stems from the fact that Old Republic International operates in the always-needed insurance sector. Just as people need food and drink, so too do they need insurance. Now, insurance is not a sector that has high barriers to keep competitors out, so to survive and thrive, you need to be long-established and have an institutionally conservative business model that can withstand economic downturns. Old Republic International has been in operation for 130 years, is one of the fifty largest publicly-traded insurance providers in the U.S., holds investments worth $14.18 billion, and was able to keep paying consecutively rising dividends during the Great Recession of the late-2000s. True, growth going forward will not be spectacular - projected EPS growth over the next five years is estimated to be 10.00% - but income is practically guaranteed.
What is not guaranteed, however, is whether Old Republic International is worth buying now. Currently, the stock trades in the low-$20 range with a price-to-earnings ratio of 9.12 and a dividend yield of 3.51%. The five-year average P/E is 12.02 and the five-year average dividend yield is 3.98%. These figures do not make clear at first sight what fair value is for Old Republic International.
First, if we divide the current P/E by the market's historical average of 15, we get a valuation ratio of 0.61 (9.12 / 15 = 0.61). Dividing the current share price of $22.40 by 0.61 gives us a fair value of $36.72, which suggests that Old Republic International is very undervalued at present. Second, if we divide the current P/E by the five-year average P/E (9.12 / 12.02), we get a valuation ratio of 0.76, and dividing the current share price by this ratio gives us a fair value of $29.47, which still suggests the stock is undervalued. Finally, dividing the five-year average dividend yield by the current dividend yield (3.98 / 3.51) provides a valuation ratio of 1.13, and dividing the current share price by this gives a fair value of $19.82.
Now, if we average these three figures together [(36.72 + 29.47 + 19.82) / 3], we get a fair value figure of $28.67 for Old Republic International, which suggests that the stock is undervalued by 28% at this time. So, in a market where bargains are few and far between, we have a solid, conservatively-run insurance underwriter with a strong balance sheet, decent revenue, and net income figures, and a stellar dividend track record now trading 28% below fair value. Many will dispute this conclusion as it has traded more cheaply in recent years, but I contend that Old Republic International is a buy at this time.
Disclosure: I/we have no positions in any stocks mentioned, but may initiate a long position in ORI over the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.
Additional disclosure: DISCLAIMER: The author is not a financial professional and accepts no responsibility for any investment decisions a reader makes. This article is presented for information purposes only. Furthermore, the figures presented are the product of the author's own research and may differ from those of other analysts. Always do your own due diligence when researching prospective investments.
Institutional Ownership ... 76.27%
This company is great. I keep adding.
I'm holding as well, I like those yearly divi increases.
It's a great yield. Even better ... we are not alone. I am initiating a position on Tuesday.
% of Shares Held by All Insider and 5% Owners: 17%
% of Shares Held by Institutional & Mutual Fund Owners: 78%
Number of Institutions Holding Shares: 270
Another breakout week coming here. 17 then 18
Looking good here now... Love this company. A retest to 16.78 will happen
Tested the PAR SAR on the daily and now a move back over $16 is due. The buyers are simply over taking the sellers and this sideways movement is all most resolved. Then we March to 16.50 near term. Great company. Nice dividend. A value play here if you are an investor. Some great price action if you are a trader.
Looking good! On its way to 16.33
What's the yield on this stock ? Price per share ? Looking to get in ! Thank you
Large gains today! ORI is listed as on one top stocks that are actively being accumulated by insiders and reflecting positive sentiment among the Wall Street analysts that follow the company.
Old Republic Announces Regular Second-Quarter-Dividend-of-17.50-Cents-PR05/11
Old Republic (NYSE:ORI)
Intraday Stock Chart
Today : Thursday 12 May 2011
The Board of Directors of Old Republic International Corporation (NYSE: ORI) today declared a quarterly cash dividend on the common stock of 17.50 cents per share. This dividend is payable June 15, 2011, to shareholders of record on June 3, 2011. Subject to quarterly board approval of each quarter's new rate, the full year's cash dividend will amount to 70 cents per share compared to 69 cents paid in 2010.
This latest dividend increase marks the 30th consecutive year that Old Republic has boosted its cash dividend rate, and 2011 becomes the 70th year of uninterrupted cash dividend payments.
About Old Republic
Chicago-based Old Republic International Corporation is an insurance holding company whose subsidiaries market, underwrite and provide risk management services for a wide variety of coverages, principally in the property and liability, mortgage guaranty and title insurance fields. One of the nation's 50 largest publicly owned insurance organizations, Old Republic has assets of approximately $16.30 billion and common shareholders' equity of nearly $4.05 billion or $15.87 per share. Its current stock market valuation is approximately $3.23 billion or $12.49 per share.
For the latest news releases and other corporate documents on Old Republic International visit www.oldrepublic.com
Very nice looks good!