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Old Republic International Corp. (ORI)
NYSE:ORI
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Old Republic International
(NYSE:ORI)
78Outperform
Positive Factors
General Insurance Growth
The General Insurance segment showed strong growth with net earned premiums increasing by 14%, beating the estimated 10%.
Specialty Insurance Performance
Old Republic's Specialty Insurance segment exceeded expectations with strong premium growth and favorable underwriting income.
Negative Factors
Title Insurance Challenges
The Title Insurance segment continues to struggle with high mortgage rates and housing prices, impacting refinance activity and home affordability.
Title Insurance Revenue Uncertainty
There are ongoing concerns about revenue and earnings uncertainty in the Title Insurance segment and broader market reserve and inflation issues in commercial auto and general liability.
Old Republic International (ORI) vs. S&P 500 (SPY)
Market Cap
$9.15B
Dividend Yield3.07%
Average Volume (3M)1.45M
Price to Earnings (P/E)11.4
Beta (1Y)0.49
Revenue Growth13.41%
EPS Growth55.56%
CountryUS
Employees9,400
SectorFinancial
Sector Strength79
IndustryInsurance - Diversified
Share Statistics
EPS (TTM)3.23
Shares Outstanding247,161,870
10 Day Avg. Volume1,486,632
30 Day Avg. Volume1,454,104
Financial Highlights & Ratios
PEG Ratio0.21
Price to Book (P/B)N/A
Price to Sales (P/S)1.13
Price to Cash Flow (P/CF)6.50
P/FCF Ratio5.50
Enterprise Value/Market CapN/A
Enterprise Value/RevenueN/A
Enterprise Value/Gross ProfitN/A
Enterprise Value/EbitdaN/A
Forecast
1Y Price Target
$41.50Price Target Upside13.45% Upside
Rating ConsensusModerate Buy
Number of Analyst Covering3
Old Republic International Business Overview & Revenue Model
Company DescriptionOld Republic International Corporation (ORI) is one of the largest publicly held insurance organizations in the United States. Founded in 1923 and headquartered in Chicago, Illinois, ORI operates in two main segments: General Insurance Group and Title Insurance Group. The General Insurance Group provides property and liability insurance, while the Title Insurance Group offers title insurance policies and related services. The company is recognized for its comprehensive insurance solutions catering to a wide array of industries including aviation, trucking, and construction.
How the Company Makes MoneyOld Republic International (ORI) generates revenue primarily through the underwriting and sale of insurance policies across its two main business segments: General Insurance and Title Insurance. In the General Insurance Group, ORI offers various types of insurance products, including property, liability, and workers' compensation insurance, earning premiums from policyholders. The Title Insurance Group contributes to revenue by providing title insurance policies, which protect real estate owners and lenders from financial losses related to defects in the title of a property. Additionally, ORI earns investment income from its portfolio of invested assets, which includes bonds and equities, that supports its insurance operations. The company's financial performance is bolstered by its strategic partnerships with independent agents and brokers, who help distribute its insurance products to a broad client base.
Old Republic International Financial Statement Overview
Summary
Old Republic International demonstrates solid financial health with strong revenue growth of 13.4% and a debt-free balance sheet. However, potential concerns arise from the absence of recent EBIT and EBITDA metrics, and a decline in free cash flow.Income Statement
Old Republic International shows a strong revenue growth of 13.4% in the latest year, coupled with a high gross profit margin consistently at 100%. However, the absence of EBIT and EBITDA metrics in recent years suggests a potential decline in operational profitability tracking.72
Positive
Balance Sheet
The company maintains a robust balance sheet with no debt as of the latest year, reflecting strong financial stability. The equity ratio stands at 20.2%, indicating a well-capitalized position. An increasing trend in stockholders' equity further enhances financial strength.85
Very Positive
Cash Flow
Despite the lack of operating cash flow data in the latest year, previous periods show consistent free cash flow, though there is a notable decline in free cash flow in the current year. Historical operating cash flow to net income ratios indicate efficient cash management.65
Positive
| Breakdown | ||||
| Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 | Dec 2020 |
|---|---|---|---|---|
| Income Statement | Total Revenue | |||
| 8.23B | 7.26B | 8.08B | 9.34B | 7.17B | Gross Profit |
| 8.23B | 7.26B | 8.08B | 9.34B | 7.17B | EBIT |
| 0.00 | 0.00 | 923.90M | 1.78B | 557.10M | EBITDA |
| 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | Net Income Common Stockholders |
| 852.70M | 598.60M | 686.40M | 1.53B | 558.60M |
| Balance Sheet | Cash, Cash Equivalents and Short-Term Investments | |||
| 201.90M | 2.82B | 12.69B | 11.40B | 11.37B | Total Assets |
| 27.84B | 26.50B | 25.16B | 24.98B | 22.82B | Total Debt |
| 1.59B | 1.59B | 1.60B | 1.59B | 966.40M | Net Debt |
| -201.90M | 1.39B | -11.09B | -9.81B | -10.40B | Total Liabilities |
| 22.22B | 20.09B | 18.99B | 1.84B | 1.10B | Stockholders Equity |
| 5.62B | 6.41B | 6.17B | 6.89B | 6.19B |
| Cash Flow | Free Cash Flow | |||
| 1.23B | 880.40M | 1.17B | 1.31B | 1.19B | Operating Cash Flow |
| 1.23B | 880.40M | 1.17B | 1.31B | 1.19B | Investing Cash Flow |
| -1.80M | 25.30M | -415.00M | -936.50M | -845.20M | Financing Cash Flow |
| -1.23B | -783.20M | -832.70M | -335.70M | -300.00M |
Old Republic International Technical Analysis
Negative
36.58
Price Trends
37.11
Negative
36.00
Positive
33.90
Positive
Market Momentum
0.69
Negative
73.09
Negative
86.91
Negative
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For ORI, the sentiment is Negative. The current price of 36.58 is below the 20-day moving average (MA) of 37.86, below the 50-day MA of 37.11, and above the 200-day MA of 33.90, indicating a neutral trend. The MACD of 0.69 indicates Negative momentum. The RSI at 73.09 is Negative, neither overbought nor oversold. The STOCH value of 86.91 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for ORI.
Old Republic International Risk Analysis
Old Republic International disclosed 22 risk factors in its most recent earnings report. Old Republic International reported the most risks in the “Finance & Corporate” category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 0 New Risks
Old Republic International Peers Comparison
Overall Rating
UnderperformOutperform
Sector (64)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
79 Outperform | $34.37B | 8.17 | 22.02% | ― | 26.24% | -3.87% | |
79 Outperform | $33.21B | 11.25 | 19.58% | 1.70% | 8.19% | 29.77% | |
78 Outperform | $9.15B | 11.42 | 14.17% | 3.07% | 13.41% | 55.56% | |
77 Outperform | $4.95B | 9.24 | 9.91% | ― | -15.68% | -47.11% | |
76 Outperform | $4.24B | 97.45 | 60.58% | ― | 20.37% | 111.74% | |
66 Neutral | $17.38B | 11.57 | 14.28% | 3.77% | 18.02% | 171.70% | |
64 Neutral | $13.46B | 9.44 | 9.34% | 4.72% | 16.14% | -8.80% |
* Financial Sector Average
Performance Comparison
ORI
Old Republic International
36.58
9.49
35.03%
ACGL
Arch Capital Group
90.58
3.75
4.32%
ESGR
Enstar Group
332.23
47.40
16.64%
HIG
Hartford Financial
114.79
19.11
19.97%
PFG
Principal Financial
71.96
-5.52
-7.12%
GSHD
GooseHead Insurance
111.03
55.08
98.45%
Old Republic International Earnings Call Summary
Earnings Call Date: Jan 23, 2025 | % Change Since: 3.16% | Next Earnings Date: Apr 24, 2025
Earnings Call Sentiment Positive
The earnings call reflected a strong performance with significant growth in key areas such as Specialty Insurance and Title Insurance, despite some challenges like investment value decrease and unfavorable developments in specific segments. The company's proactive capital management and strategic growth initiatives contribute to a positive outlook.Highlights
Increase in Consolidated Pretax Operating Income
Consolidated pretax operating income increased to $285 million in Q4 2024 from $237 million in Q4 2023.
Specialty Insurance Growth
Specialty Insurance net premiums earned grew by 13% in Q4 2024 with pretax operating income rising to $228 million from $195 million last year.
Title Insurance Performance
Title Insurance grew premiums and fees by 9% and increased pretax operating income to $55 million from $44 million in Q4 2023.
Special Dividend and Capital Management
A special dividend of $2 per share was declared, contributing to a total capital return of just over $1.7 billion for the year.
Investment Income Increase
Net investment income increased by 10% in the quarter and 16% for the year, driven by higher yields on the bond portfolio.
Lowlights
Decrease in Total Investment Portfolio Value
The value of the total investment portfolio decreased by about $400 million during the quarter.
Unfavorable Development in General Liability
Unfavorable development was noted in general liability, which was spread across multiple subsidiaries and accident years.
Exit from Transactional Risk
The company decided to exit transactional risk, which contributed less than $20 million of premium in 2024, due to unfavorable experience.
Property Catastrophic Losses
Estimated losses from the Los Angeles wildfires were between $10 million and $15 million.
Company Guidance
During the Old Republic International's Q4 2024 earnings call, several key metrics were highlighted as part of the company's guidance and performance summary. The company reported a consolidated pretax operating income of $285 million, up from $237 million in 2023, and a consolidated combined ratio of 92.7%, an improvement from 93.3% in the previous year. Specialty Insurance net premiums earned grew by 13% in the quarter, with a combined ratio of 91.8%. Additionally, Title Insurance premiums and fees increased by 9%, achieving a pretax operating income of $55 million, up from $44 million last year, with a combined ratio of 94.4%. The company also declared a special dividend of $2 per share, reducing the book value per share accordingly, and repurchased $174 million worth of shares in the quarter. The balance sheet remained robust, and the guidance suggested continued growth and profitability in Specialty Insurance into 2025, alongside improvements in Title Insurance driven by better market conditions and operational strategies.Glossary
OutperformA stock rated as "Outperform" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock is likely to deliver higher returns compared to the average returns of other stocks in the same sector or market index. Investors might consider this stock a good buying opportunity.
NeutralA stock rated as "Neutral" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly attractive nor unattractive for investment. Investors may consider holding onto the stock, as it is not expected to either significantly outperform or underperform the market.
UnderperformA stock rated as "Underperform" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock may deliver lower returns compared to the average returns of other stocks in the same sector or market index. Investors might consider selling the stock or avoiding it as an investment.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.