The following stock analysis is about an insurance company called ORI, it is not so well known but currently, it gets more and more attractive in the dividend investors community. But let's have a look at the current valuation and if it is worth an investment.

Old Republic International Corporation (ORI) is an insurance company with an impressive history of dividend payments. It is one of the so-called dividend aristocrats as it has increased its dividend for now already 35 years. Nevertheless, the stock currently seems to be overvalued, as it is very close to its 5 year high of 21.19 USD.

But is it really the case? Well, let's have a look at the development the fundamentals.

Development Earnings per share

source:morningstar.com

As you can see the development of the EPS in the last 4 years have been very stable, but at the same time the growth was very low. If I compare the growth of the EPS from to 2013 to 2016, which is in total 3.18%, to the development of the stock price from 2014 until the end of the year 2016, which is 21.63%, the stock seems to be overvalued. The price on the 30th of December 2013 was 15.62 USD and on the 30th of December in 2016 it was 19.00 USD.

Development of Free Cashflow per share

source:morningstar.com

Again you can see a quite stable free cashflow per share throughout the years, even though in 2014 it was negative. But again no growth at all, you actually can see a decline of 25%.

Development of Book Value per Share

source:morningstar.com

There you can finally see the growth of 18.27% and this almost in line with development of the share price in the last 4 years. Interesting to see is the very low price/book ratio of 1.09 in 2013 and of 1.12 in the end of 2016. Where does that come from? Well I guess ORI is not on every investors radar. But I think through the attractive dividend yield this will change in the future.

Finally, let's have a look at the dividend yield. In the end of 2013 the dividend yield was at 4.6%, by the end of 2016 it was at 3.94% and currently, it is 3.71%. As the growth of the dividend is very low, the yield of course, is decreasing. I personally was very lucky as I bought ORI for 16.90 USD per share at the dip in November. So I currently have yield of costs of 4.43%.

Summary

Some would think that currently the stock is overvalued even though it offers an attractive yield of 3.71% the growth per year is just too low to buy it at the current prices. But this slow growth is also an explanation for the very low price/book ratio as most of the investors are aiming for more growth. Nevertheless, ORI is an attractive stock and a very good addition to my portfolio. It offers a stable dividend, with a reasonable payout ratio, in a very stable sector. It's just a boring stock and in this case, boring is good.