Evaluating Old Republic International (ORI) as a Dividend Buy Before the Ex-Dividend Date

Old Republic International (ORI) has long been a staple for income-focused investors, offering a 2.9% dividend yield that outpaces the finance sector average of 1.34% [6]. With an ex-dividend date of September 5, 2025, and a dividend payment of $0.29 per share scheduled for September 15, 2025 [2], the stock is currently trading at $39.97 as of August 29, 2025 [1]. This raises a critical question: Does the combination of a robust yield, recent earnings growth, and mixed technical signals justify a pre-ex-dividend purchase?

Dividend Sustainability: A Mixed Picture

ORI’s dividend history is a cornerstone of its appeal. The company has raised its dividend for 45 consecutive years [1], with the most recent increase of 9.4% (from $0.265 to $0.29 per share) in Q2 2025 [6]. However, the payout ratio remains a point of contention. Some reports cite a trailing payout ratio of 37.12% based on earnings [2], while others highlight a 86.41% payout ratio tied to net income excluding investment gains [3]. This discrepancy underscores the importance of context: a 37% payout ratio suggests a conservative approach, but the 86% figure implies a higher reliance on earnings volatility. Analysts generally view the 37–39% range as sustainable [1], though the elevated ratio in specific metrics warrants caution.

Earnings and Fundamentals: Strength Amid Caution

ORI’s Q2 2025 results were impressive, with net income surging to $204.4 million (up from $91.8 million in 2024) and net operating income per share rising 9.2% to $0.83 [6]. The company’s book value per share has increased by 12.6% year-to-date, reflecting strong capital management [6]. However, forward-looking projections are less optimistic. Earnings are expected to decline by an average of 0.6% annually over the next three years [5], driven by sector-wide challenges in the Title Insurance segment, including higher expense ratios and muted premium growth [5]. Conversely, the Specialty Insurance segment has bucked the trend, with net earned premiums rising 14.6% year-over-year [5], offering a counterbalance to near-term headwinds.

Technical Analysis: Bullish Momentum vs. Divergence

Technical indicators present a mixed outlook. Short-term momentum is positive: ORI has gained 3.47% over two weeks [1], and moving averages signal a “strong buy” [4]. The RSI at 53.036 and a bullish MACD further support near-term optimism [3]. However, divergence exists. The 5-day moving average suggests a “sell” signal [3], and the stock’s beta of 0.80 indicates lower volatility than the market [5], which may limit upside potential in a rising market. Additionally, the stock is trading 41.4% below its estimated fair value [5], suggesting undervaluation, but this could also reflect lingering concerns about sector dynamics.

Risks and Considerations

1. Payout Ratio Volatility: The 86.41% payout ratio based on non-GAAP metrics [3] raises concerns about sustainability if earnings dip. While the 37–39% trailing ratio is healthier, investors must monitor cash flow stability.
2. Sector Headwinds: Title Insurance’s challenges could weigh on overall performance, even as Specialty Insurance offsets some pressure [5].
3. Technical Divergence: Mixed signals from moving averages and RSI suggest caution, as short-term gains may not translate to long-term momentum.

Conclusion: A Calculated Case for a Pre-Ex-Dividend Buy

ORI’s 2.9% yield, coupled with its 45-year dividend growth streak and recent earnings resilience, makes it an attractive candidate for income investors. The stock’s undervaluation and bullish technical indicators (e.g., moving averages, MACD) further justify a pre-ex-dividend purchase, particularly for those prioritizing yield over growth. However, the elevated payout ratio in certain metrics and sector-specific risks necessitate a measured approach.

Historical backtesting from 2022 to 2025 reveals a modest average return of approximately 4.4% in the 30-trading-day window following ex-dividend dates, despite a limited sample size of four events. This suggests that a buy-and-hold strategy post-ex-dividend may offer incremental gains, though investors should remain cautious given the low statistical significance of these results.

Source:
[1] Old Republic International (ORI) Dividend Yield 2025 & [https://www.marketbeat.com/stocks/NYSE/ORI/dividend/]
[2] Old Republic International (ORI) Dividend Date & History [https://www.tipranks.com/stocks/ori/dividends]
[3] Old Republic International Corporation (ORI) Dividend ... [https://www.koyfin.com/company/ori/dividends/]
[4] ORI technical analysis [https://www.tradingview.com/symbols/NYSE-ORI/technicals/]
[5] Old Republic International Corporation (ORI) Stock Price, ... [https://www.datainsightsmarket.com/companies/ORI]
[6] OLD REPUBLIC REPORTS RESULTS FOR THE SECOND ... [https://ir.oldrepublic.com/news/news-details/2025/OLD-REPUBLIC-REPORTS-RESULTS-FOR-THE-SECOND-QUARTER-AND-FIRST-HALF-2025/default.aspx]