Old Republic International (ORI): Buy, Sell, or Hold Post Q2 Earnings?

Old Republic International currently trades at $36 per share and has shown little upside over the past six months, posting a small loss of 0.7%. The stock also fell short of the S&P 500’s 5.7% gain during that period.

Is there a buying opportunity in Old Republic International, or does it present a risk to your portfolio? Dive into our full research report to see our analyst team’s opinion, it’s free.

Why Is Old Republic International Not Exciting?

We're sitting this one out for now. Here are three reasons why we avoid ORI and a stock we'd rather own.

1. Net Premiums Earned Points to Soft Demand

While financial institutions generate revenue from multiple sources, investors view net interest income as a cornerstone - its predictable, recurring characteristics stand in sharp contrast to the volatility of one-time fees.

Old Republic International’s net premiums earned has grown at a 5.2% annualized rate over the last five years, worse than the broader insurance industry and slower than its total revenue.

2. Recent EPS Growth Below Our Standards

While long-term earnings trends give us the big picture, we also track EPS over a shorter period because it can provide insight into an emerging theme or development for the business.

Old Republic International’s EPS grew at a weak 9.5% compounded annual growth rate over the last two years. On the bright side, this performance was higher than its 6.6% annualized revenue growth and tells us the company became more profitable on a per-share basis as it expanded.

3. Substandard BVPS Growth Indicates Limited Asset Expansion

We consider book value per share (BVPS) a critical metric for insurance companies. BVPS represents the total net worth per share, providing insight into a company’s financial strength and ability to meet policyholder obligations.

Disappointingly for investors, Old Republic International’s BVPS grew at a tepid 8.2% annual clip over the last two years.

Final Judgment

Old Republic International isn’t a terrible business, but it doesn’t pass our bar. With its shares lagging the market recently, the stock trades at 1.4× forward P/B (or $36 per share). Investors with a higher risk tolerance might like the company, but we think the potential downside is too great. We're pretty confident there are superior stocks to buy right now. We’d recommend looking at a top digital advertising platform riding the creator economy.

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