Shares of Old Republic International Corporation ORI closed at $39.62 on Tuesday, near its 52-week high of $39.84. This proximity underscores investor confidence. It has the ingredients for further price appreciation. The stock is trading above the 50-day and 200-day simple moving averages (SMA) of $37.16 and $35.38, respectively, indicating solid upward momentum. SMA is a widely used technical analysis tool to predict future price trends by analyzing historical price data.

Earnings of Old Republic International grew 8.8% in the last five years. ORI has a solid surprise history. The insurer has a solid track record of beating earnings estimates in three of the last four quarters while missing in one, the average being 37.25%.

The insurer has a market capitalization of $9.79 billion. The average volume of shares traded in the last three months was 1.22 million.

ORI is an Outperformer

Shares of Old Republic International have gained 28.1% in the past year, outperforming its industry, the Finance sector and the Zacks S&P 500 composite’s growth of 8.5%, 15.3% and 8.1%, respectively.

ORI outperforms Industry, Finance sector and S&P in One Year

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ORI’s Encouraging Growth Projection

The Zacks Consensus Estimate for Old Republic International’s 2025 earnings per share indicates a year-over-year increase of 4.9%. The consensus estimate for revenues is pegged at $8.82 billion, implying a year-over-year improvement of 8%. The consensus estimate for 2026 earnings per share and revenues indicates an increase of 4.7% and 6.2%, respectively, from the corresponding 2024 estimates.

Attractive Valuation

The stock is trading at a discount to the industry. Its price-to-book value of 1.79X is lower than the industry average of 2.64X.
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 The Travelers Companies, Inc. TRV are trading at a multiple higher than the industry average.

ORI’s Favorable Return on Capital

Return on equity (ROE) for the trailing 12 months was 20.3%, which compared favorably with the industry’s 14.5%. 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 11%, better than the industry average of 2.1%.

Factors Acting in Favor of ORI

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.

Conclusion

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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The Travelers Companies, Inc. (TRV) : Free Stock Analysis Report

Cincinnati Financial Corporation (CINF) : Free Stock Analysis Report

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

This article originally published on Zacks Investment Research (zacks.com).

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