Old Republic International Corporation ORI has been trading below its 50-day simple moving average (SMA), signaling a short-term bearish trend. As of Jan. 14, 2025, its share price was $34.55, down 12% from its 52-week high of $39.27.

The 50-day SMA is a key indicator for traders and analysts to identify support and resistance levels. It is considered particularly important as this is the first marker of an uptrend or downtrend. 

With a market capitalization of $8.8 billion, Old Republic International is the third-largest title insurer in the country. Its solid market presence, niche focus, low property catastrophe exposure in its General Insurance segment and strong capital position poise ORI well for growth.

ORI Price Movement vs. 50-Day Moving Average

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ORI is an Outperformer

Shares of ORI have gained 9.4% in the past six months, outperforming its industry’s increase of 0.1%, the sector’s rise of 6.7% and the Zacks S&P 500 composite’s gain of 4% in the same time frame.

ORI Vs. Industry, Sector and S&P 500 in 6-Months

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Based on short-term price targets offered by two analysts, the Zacks average price target is $39.50 per share. The average suggests a potential 17.1% upside from Tuesday’s closing price.

ORI’s Favorable Return on Capital

Return on equity (ROE) for the trailing 12 months was 19.1%, comparing favorably with the industry’s 15.3%. This reflects its efficiency in utilizing shareholders’ funds. ORI’s ROE has been increasing over the last few quarters.

Also, return on invested capital (ROIC) has been increasing over the last few quarters as the company raised its capital investment over the same time frame. This reflects ORI’s efficiency in utilizing funds to generate income. ROIC in the trailing 12 months was 10.6%, better than the industry average of 2.4%.

Optimistic Analyst Sentiment Instills Confidence in ORI

The Zacks Consensus Estimate for 2025 earnings stands at $3.08, suggesting an increase of 12.8% on 7.4% higher revenues of $8.7 billion. 

Factors Driving Old Republic International 

ORI has a diverse and decentralized portfolio of specialty insurance products and services. 

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 for a combined ratio between 90 and 95.

The Title business, meanwhile, should continue to benefit from an expanding presence in the commercial real estate market.

ORI Shares Are Cheap

The stock is trading at a discount to the industry. Its price-to-book value of 1.36X is lower than the industry average of 2.29X.

The company has a Value Score of B. This style score helps find the most attractive value stocks. 

Shares of other insurers like Arch Capital Group ACGL, Cincinnati Financial Corporation CINF and W. R. Berkley Corporation WRB are trading at a multiple higher than the industry average.

Parting Thoughts on ORI Shares

For long-term growth, the insurer continues to invest in new general insurance specialty underwriting subsidiaries and technology for both general insurance and title insurance.   The insurer writes less catastrophe-exposed business than most of its peers, safeguarding its combined ratio to some extent.

ORI’s dividend history is impressive. It has hiked dividends for the last 43 years. Its dividend yield of 3.1% appears attractive compared with the industry average of 2.5%, making it an attractive pick for yield-seeking investors. The insurer also engages in regular buybacks. Its solid VGM Score of B and its target price instill confidence. 

However, a high debt level, an increase in interest expense and a lower asset base in a low interest rate environment keep us cautious about this Zacks Rank #3 (Hold) stock.

You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

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W.R. Berkley Corporation (WRB) : Free Stock Analysis Report

Cincinnati Financial Corporation (CINF) : Free Stock Analysis Report

Arch Capital Group Ltd. (ACGL) : Free Stock Analysis Report

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

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