E Old Republic International: Undervalued Dividend Champion

Given also the 4.4% dividend yield of Old Republic and its expected 4% average annual earnings-per-share growth, the stock is likely to offer a 12.2% average annual return over the next five years. This expected return is certainly attractive, particularly given the fact that the broad market is trading at an all-time high, at a rich valuation level.

Final thoughts

The broader stock market is trading at an all-time high level while interest rates are nearly record-low. As a result, it has become particularly challenging for income-oriented investors to identify dividend champions with an attractive yield and valuation. Old Republic is a notable exception. The stock is offering a safe 4.4% dividend yield and is trading at an attractive valuation level. Given also its exceptional dividend growth record, its healthy payout ratio and its strong balance sheet, Old Republic is likely to continue raising its dividend for many more years. 

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