Portfolio Update
The FiveTwenty portfolio received no dividends in the past week.
| Past Week Dividend | $0 |
| Current Quarter Dividend (Q2 2022) | $0 |
| LifeTime Dividend | $3,284.67 |
| Estimated Annual Dividend | $4,859.55 |
The capital allocation for the week of 04/10/2022 to 04/16/2022 will be used to add to our position in Old Republic International (NYSE: ORI)
ORI – Position Update
Since our last check-in on ORI in week 36 of 2021, the company reported Q3 2021 earnings on 10/28/2021, and Q4 and full year 2021 earnings on 01/27/2022. In addition, the share price decreased 4.6% from $25.29 to $24.12 during the same period.
| TTM | Prev. Update | 10-year median | |
| Dividend Streak | 41 years | 40 years | |
| Yield | 3.69% | 3.44% | 4.19% |
| Payout Ratio | 28.90%1 | 31.18%2 | |
| P/E | 7.831 | 9.062 |
1 computed using operating EPS of $3.08 as of Q4 2021
2 computed using operating EPS of $2.79 as of Q2 2021
FY 2021 earnings report
Did ORI’s latest earnings report raise any warning flags?
For FY 2021, ORI saw consolidated net premiums and fees earned grow 18.8% compared to the 2020. General Insurance net premiums earned increased 4.8% for the year. Title Insurance net premiums and fees earned grew 34% for the year driven by a strong real estate market. Overall, operating revenue grew 17.5%, operating net income increased 39.5%, and operating EPS were 37.5% higher compared to FY 2020.
| Op. Revenue (in millions) | Op. Net Income (in millions) | Op. EPS . | |
| 2020 | $7,308 | $670.8 | $2.24 |
| 2021 | $8,584 | $935.9 | $3.08 |
| % Change | 17.5% | 39.5% | 37.5% |
Additional noteworthy developments during the quarter:
- As of December 31, 2021, book value per share was $22.76 up from $20.75 on December 31, 2020.
- On 02/25/2022, ORI declared a quarterly dividend of $0.23 per share payable 03/14/2022 to shareholders of record 03/07/2022. The new dividend represents a 4.5% raise in the quarterly payout and pushes the dividend growth streak for ORI to 41 years.
Thesis
Why are we adding to our position in ORI?
ORI had a solid FY 2021. The company’s Title Insurance business benefitted greatly from a strong housing market and could weaken if the housing market cools.
However, the has not been any event threatening the ongoing profitability of the company. Furthermore, the 2 special dividends ORI paid during the year and the most recent dividend increase demonstrate the company’s commitment to its dividend. Therefore, we view the share price decline in the first week of April as an opportunity to add to our position at an improved valuation.
Previous Articles
- 2021 Week 36: Old Republic International (NYSE: ORI)
- 2021 Week 22: Old Republic International (NYSE: ORI)
Photo by Tierra Mallorca on Unsplash
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