Lately I was writing about my watch list where I had 2 stocks on my radar. One was American Reynolds with offering an attractive yield of around 3.9%. But unfortunately, after the offer of BAT the stock price increased by almost 20% so I honestly waited too long and missed that deal :(.
Nevertheless, in the last week there came up another opportunity as the price of my second stock dropped by almost 10% after releasing their quarterly earnings, which were a little behind the market expectations. In my opinion this was a typical market overreaction, but anyway I liked it :).
Now the company offers an attractive yield of 4.5%, and the name is Old Republic International an insurance company, which increased its dividends since 34 years and with very decent payout ratio of 51 %. One weakness of ORI is that it only increases its dividend by 1 cent per year, but considering the current yield I am ok with that.
Short summary of Old Republic International
Old Republic International is an insurance company and operates in the following segments:
- General Insurance
- Mortgage Guaranty
- Title Insurance Groups
The company was founded in 1923 and is located in Chicago.
Through its recent drop the share price is now 17.10% away from its 52 week of 20.00 USD and is currently trading at 16.58 USD.
After all I bought 80 shares of ORI, which will add 60 USD to my yearly dividend income considering a dividend rate 0.75 USD, before taxes of course.
ORI is now my second insurance company besides the Münchner Rück. A third one is also on my radar, it is the german insurance company Allianz.
My new dividend Income
Before taxes my forward full year dividend income is now at 1081.62 EUR with a yield on costs of 3.80% and after taxes it is at 783.38 EUR with a yield on costs of 2.75%. My goal until the end of 2017 is to have a dividend income of 1200 EUR after tax.
Please be aware this might vary considering the changes in the exchange rate USD to EUR.
Honestly I am now very happy to finally have ORI in my portfolio as it was on my list for a very long time.
To sum up one deal is better than no deal and market overreactions are the best friends of the long-term investors :).
What do you think about ORI? Do you also have it in your portfolio?