Critical Review: Old Republic International (NYSE:ORI) & Fidelity National Financial (NYSE:FNF)

Fidelity National Financial (NYSE:FNF) and Old Republic International (NYSE:ORI) are both large-cap finance companies, but which is the superior business? We will compare the two companies based on the strength of their valuation, dividends, institutional ownership, analyst recommendations, risk, profitability and earnings.

Dividends

Fidelity National Financial pays an annual dividend of $2.08 per share and has a dividend yield of 4.0%. Old Republic International pays an annual dividend of $1.26 per share and has a dividend yield of 3.0%. Fidelity National Financial pays out 75.9% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Old Republic International pays out 33.8% of its earnings in the form of a dividend. Fidelity National Financial has raised its dividend for 1 consecutive years and Old Republic International has raised its dividend for 45 consecutive years.

Institutional & Insider Ownership

81.2% of Fidelity National Financial shares are owned by institutional investors. Comparatively, 70.9% of Old Republic International shares are owned by institutional investors. 5.7% of Fidelity National Financial shares are owned by company insiders. Comparatively, 1.3% of Old Republic International shares are owned by company insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a stock is poised for long-term growth.

Profitability

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

	Net Margins	Return on Equity	Return on Assets
Fidelity National Financial	5.10%	15.49%	1.29%
Old Republic International	11.71%	15.41%	3.10%

Analyst Ratings

This is a breakdown of current ratings and price targets for Fidelity National Financial and Old Republic International, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Fidelity National Financial	1	2	2	0	2.20
Old Republic International	0	2	1	1	2.75

Fidelity National Financial currently has a consensus target price of $56.00, indicating a potential upside of 8.45%. Old Republic International has a consensus target price of $41.50, indicating a potential downside of 1.73%. Given Fidelity National Financial’s higher possible upside, research analysts plainly believe Fidelity National Financial is more favorable than Old Republic International.

Volatility & Risk

Fidelity National Financial has a beta of 0.96, suggesting that its share price is 4% less volatile than the S&P 500. Comparatively, Old Republic International has a beta of 0.58, suggesting that its share price is 42% less volatile than the S&P 500.

Earnings & Valuation

This table compares Fidelity National Financial and Old Republic International”s top-line revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Fidelity National Financial	$14.59 billion	0.95	$602.00 million	$2.74	18.85
Old Republic International	$9.14 billion	1.12	$935.40 million	$3.73	11.32

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

About Fidelity National Financial

Fidelity National Financial, Inc., together with its subsidiaries, provides various insurance products in the United States. The company operates through Title, F&G, and Corporate and Other segments. It offers title insurance, escrow, and other title related services, including trust activities, trustee sales guarantees, recordings and reconveyances, and home warranty products. The company also provides technology and transaction services to the real estate and mortgage industries; and mortgage transaction services, including title-related services and facilitation of production and management of mortgage loans. In addition, it offers annuity and life insurance products, such as deferred and immediate annuities, as well as indexed universal life insurance products; and funding agreements and pension risk transfer (PRT) solutions. Further, the company engages in the real estate brokerage business. Fidelity National Financial, Inc. was incorporated in 2005 and is headquartered in Jacksonville, Florida.

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. It operates through three segments: General Insurance, Title Insurance, and Republic Financial Indemnity Group Run-off Business. The General Insurance segment offers aviation, commercial auto, commercial multi-peril, commercial property, general liability, home and auto warranty, inland marine, travel accident, and workers' compensation insurance products; and financial indemnity products for specialty coverages, including errors and omissions, fidelity, directors and officers, and surety. This segment provides its insurance products to businesses, state and local 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 segment offers lenders' and owners' 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. Old Republic International Corporation was founded in 1923 and is based in Chicago, Illinois.