Old Republic International
A midcap insurance stock valued at about $3.6 billion, Old Republic International (ORI) underwrites auto, boat and homeowner insurance policies. It boasts a nice 5.4% dividend and has made regular payments to shareholders since 1942.
Insurers are set up to prosper in an environment where interest rates are likely to rise — and in fact, are already modestly rising, as judged by the yield on the 10-year T-Note. That’s because the premiums that customers pay Old Republic often get invested in low-risk, interest-bearing assets. And as anyone who has looked at the rates on CDs lately knows, interest-bearing assets haven’t had any returns to speak of since the Great Recession.
With a history of consistent dividends and high yields, ORI is attractive to new investors for many reasons. Shares are up about 26% year-to-date, but the company still trades for slightly under its book value and a forward P/E of less than 13.
Adjusted for splits, the per-share dividend has doubled from about 9 cents in 2003 to 18 cents a quarter currently — which means your yield should only get better over time if you’re in Old Republic International for the long haul.