Reviewing Old Republic International (ORI) and NMI (NMIH)

Old Republic International (NYSE: ORI) and NMI (NASDAQ:NMIH) are both finance companies, but which is the better business? We will compare the two companies based on the strength of their risk, institutional ownership, valuation, dividends, analyst recommendations, profitability and earnings.

Insider and Institutional Ownership

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73.5% of Old Republic International shares are owned by institutional investors. Comparatively, 84.3% of NMI shares are owned by institutional investors. 2.0% of Old Republic International shares are owned by insiders. Comparatively, 5.4% of NMI shares are owned by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a stock will outperform the market over the long term.

Volatility & Risk

Old Republic International has a beta of 1.25, meaning that its share price is 25% more volatile than the S&P 500. Comparatively, NMI has a beta of 0.87, meaning that its share price is 13% less volatile than the S&P 500.

Analyst Recommendations

This is a breakdown of current recommendations and price targets for Old Republic International and NMI, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Old Republic International 0 0 1 1 3.50
NMI 0 0 7 0 3.00

Old Republic International currently has a consensus price target of $25.00, suggesting a potential upside of 17.32%. NMI has a consensus price target of $22.17, suggesting a potential upside of 25.24%. Given NMI’s higher probable upside, analysts clearly believe NMI is more favorable than Old Republic International.

Earnings and Valuation

This table compares Old Republic International and NMI’s top-line revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Old Republic International $6.26 billion 0.92 $560.60 million $1.11 19.20
NMI $182.74 million 6.31 $22.05 million $0.57 31.05

Old Republic International has higher revenue and earnings than NMI. Old Republic International is trading at a lower price-to-earnings ratio than NMI, indicating that it is currently the more affordable of the two stocks.

Dividends

Old Republic International pays an annual dividend of $0.78 per share and has a dividend yield of 3.7%. NMI does not pay a dividend. Old Republic International pays out 70.3% of its earnings in the form of a dividend. Old Republic International has increased its dividend for 36 consecutive years.

Profitability

This table compares Old Republic International and NMI’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Old Republic International 8.95% 6.80% 1.64%
NMI 12.07% 7.89% 4.53%

Summary

NMI beats Old Republic International on 10 of the 18 factors compared between the two stocks.

About Old Republic International

Old Republic International Corporation, through its subsidiaries, engages in the insurance underwriting and related services business primarily in the United States and Canada. The company operates through three segments: General Insurance Group, Title Insurance Group, and the Republic Financial Indemnity Group Run-off Business. The General Insurance Group segment offers automobile extended warranty, aviation, commercial automobile, commercial multi-peril, general liability, home warranty, inland marine, travel accident, and workers' compensation insurance products; and financial indemnity products for specialty coverages, including errors and omissions, fidelity, guaranteed asset protection, and surety. This segment provides its insurance products to businesses, government, and other institutions in transportation, commercial construction, healthcare, education, retail and wholesale trade, forest products, energy, general manufacturing, and financial services industries. The Title Insurance Group segment offers lenders' and owners' title insurance policies to real estate purchasers and investors based upon searches of the public records. This segment also provides escrow closing and construction disbursement services; and real estate information products, national default management services, and various other services pertaining to real estate transfers and loan transactions. The Republic Financial Indemnity Group Run-off Business segment offers private mortgage insurance coverage that protects mortgage lenders and investors from default related losses on residential mortgage loans made primarily to homebuyers. It is also involved in the consumer credit indemnity run-off business. Old Republic International Corporation was founded in 1887 and is headquartered in Chicago, Illinois.

About NMI

NMI Holdings, Inc., through its subsidiaries, provides private mortgage guaranty insurance services in the United States. The company offers mortgage insurance; reinsurance on loans; and outsourced loan review services to mortgage loan originators. It serves national and regional mortgage banks, money center banks, credit unions, community banks, builder-owned mortgage lenders, Internet-sourced lenders, and other non-bank lenders. The company was founded in 2011 and is headquartered in Emeryville, California.

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