Old Republic's Dividend Machine: 44 Years of Growth and Unwavering Resilience

Old Republic International Corporation (ORI) has quietly built one of the most reliable dividend engines in the insurance sector, maintaining a 44-year streak of consecutive annual dividend increases. This track record, paired with its robust financial metrics and underwriting discipline, positions it as a standout opportunity for income investors. Let's dissect why this insurer's dividend sustainability is a rare combination of strength and consistency.

The Dividend Streak: A Testament to Long-Term Discipline

Old Republic's dividend history is a rarity in an industry where cyclical pressures often disrupt payouts. The company has increased its dividend for 44 straight years, with 2025 marking a 9.4% raise in its regular quarterly dividend to $0.29 per share. Even more striking is its special $2.00 per share dividend in early 2025, reflecting confidence in its balance sheet.

But how sustainable is this growth? Let's look at the numbers:
- In 2024, net income per diluted share rose 54% to $3.24, fueled by strong underwriting and investment performance.
- The regular dividend payout ratio (excluding the special dividend) was 32.7%, a conservative level that leaves ample room for growth.

This payout discipline is key. Even during the 2008 financial crisis and pandemic downturns, Old Republic maintained its dividend hikes, proving its ability to weather storms.

Financial Fortitude: A Strong Balance Sheet Anchors Growth

Old Republic's balance sheet is a pillar of stability:
- Debt-to-equity ratio: A low 28.2% as of December 2024, far below peers, reducing leverage risks.
- Book value per share: Rose 11.1% in 2024 to $22.84, even after returning $1.7 billion to shareholders via dividends and buybacks.
- Cash generation: While direct cash flow from operations isn't disclosed, consolidated pretax operating income hit $999.8 million in 2024, up 6.5% year-over-year. This underscores the insurer's ability to fund dividends through underwriting profits and investment income.

The company's conservative investment strategy—84% in fixed income and minimal exposure to risky assets—ensures liquidity. This prudence allows it to sustain payouts even during market volatility.

Underwriting Excellence: The Engine Behind the Dividends

Old Republic's core insurance operations are the lifeblood of its dividend machine:
- Specialty Insurance: The segment's 92.2% combined ratio in 2024 (below its 90-95% target range) highlights pricing power and cost control. Premiums rose 13.5%, driven by rate hikes in commercial auto and liability.
- Title Insurance: Despite a 97% combined ratio, premiums grew 2.2%, and loss reserves remained manageable.

The consolidated combined ratio of 93.9% for 2024, while slightly elevated from 2023's 92.6%, remains within a sustainable range. This underwriting discipline ensures that policy premiums consistently exceed claims costs, fueling profits for dividends.

Investment Catalysts: Why Now Is the Time to Act

Old Republic's stock trades at a 12.5x P/E ratio, below its five-year average of 14x, offering a valuation discount despite its strong fundamentals. With the Federal Reserve pausing rate hikes, the tailwind for insurers—like Old Republic's $673 million in 2024 net investment income—is intact.

Key triggers for upside:
1. Dividend growth: The 9.4% regular dividend increase in 2025 signals management's confidence.
2. Share buybacks: $942 million in repurchases in 2024 reduced shares outstanding, boosting EPS and book value.
3. Cyclical resilience: With a history of thriving through economic cycles, Old Republic is positioned to outperform if market volatility returns.

Risks to Consider

No investment is without risk. Old Republic faces headwinds like rising interest rates (which could pressure investment yields) and catastrophic claims volatility. However, its fortress balance sheet and diversified operations mitigate these risks.

Final Analysis: A Dividend Darling for the Long Run

Old Republic International's 44-year dividend growth streak is no accident. Backed by strong underwriting, a fortress balance sheet, and a shareholder-friendly capital policy, it offers a reliable income stream with room to grow.

For income investors, ORI is a rare blend of safety and growth—a dividend machine that's earned its stripes. With its stock undervalued and payout ratio comfortably sustainable, now is the time to secure a piece of this enduring success story.

Investors seeking stability and income should act swiftly—Old Republic's track record won't wait for the hesitant.