Portfolio Update
The FiveTwenty portfolio received $186.75 in dividends in the past week. ABBV, APD, CAT, and PG paid their quarterly dividends during the week.
| Past Week Dividend | $186.75 |
| Current Quarter Dividend (Q4 2022) | $657.52 |
| LifeTime Dividend | $6,952.80 |
| Estimated Annual Dividend | $7,130.04 |
The capital allocation for the week of 11/20/2022 to 11/26/2022 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 15 of 2022, the company reported Q1 2022 earnings on 04/28/2022, Q2 2022 earnings on 07/28/2022, and Q3 2022 earnings on 10/27/2022. In addition, the share price decreased 1.5% from $24.12 to $23.76.
| TTM | Prev. Update | 10-year median | |
| Dividend Streak | 41 years | 41 years | |
| Yield | 3.83% | 3.69% | 4.08% |
| Payout Ratio | 31.60%1 | 28.90%2 | |
| P/E | 8.251 | 7.832 |
1 computed using operating EPS of $2.88 as of Q3 2022
2 computed using operating EPS of $3.08 as of Q4 2021
Q3 2022 earnings report
Did ORI’s latest earnings report raise any warning flags?
For Q3 2022 and the first 9 months of 2022, ORI’s General Insurance segments has continued to grow a rate of about ~7%. The Title Insurance segments on the other hand has shrunk by 15.2% and 6.9% percent respectively due to the deteriorating housing market. Overall, operating revenue decreased (4.8)%, operating net income shrank by (13.8)%, and operating EPS were (13.9)% lower compared to Q3 2021.
| Op. Revenue (in millions) | Op. Net Income (in millions) | Op. EPS . | |
| Q3 2021 | $2,204.9 | $298.7 | $0.79 |
| Q3 2022 | $2,098.2 | $257.5 | $0.68 |
| % Change | (4.8)% | (13.8)% | (13.9)% |
Additional noteworthy developments during the quarter:
- As of September 30, 2022, book value per share was $18.92 down 9.4% from year end 2021.
- The company returned $479.1 million to shareholder in the form of dividends and share repurchases.
Thesis
Why are we adding to our position in ORI?
ORI’s Title Insurance company will continue to face headwinds if there is not a recovery in the housing market. However, the dividend is well covered and the company’s other segment, Genral Insurance, has continued to grow. Long term we expect the company to remain profitable and continue to be a reliable source of dividend income.
Previous Articles
- 2022 Week 15: Old Republic International (NYSE: ORI)
- 2021 Week 36: Old Republic International (NYSE: ORI)
- 2021 Week 22: Old Republic International (NYSE: ORI)
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