Financial Analysis: Old Republic International (NYSE:ORI) and The PMI Group (OTCMKTS:PPMIQ)

The PMI Group (OTCMKTS:PPMIQ) and Old Republic International (NYSE:ORI) are both finance, insurance, and real estate companies, but which is the superior investment? We will compare the two businesses based on the strength of their profitability, valuation, risk, earnings, analyst recommendations, dividends and institutional ownership.

Analyst Ratings

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

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
The PMI Group	0	0	0	0	0.00
Old Republic International	0	0	1	0	3.00

Old Republic International has a consensus target price of $37.00, indicating a potential upside of 2.52%. Given Old Republic International’s stronger consensus rating and higher possible upside, analysts clearly believe Old Republic International is more favorable than The PMI Group.

Valuation & Earnings

This table compares The PMI Group and Old Republic International”s gross revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
The PMI Group	N/A	N/A	N/A	N/A	N/A
Old Republic International	$8.17 billion	1.12	$598.70 million	$2.90	12.44

Old Republic International has higher revenue and earnings than The PMI Group.

Profitability

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

	Net Margins	Return on Equity	Return on Assets
The PMI Group	N/A	N/A	N/A
Old Republic International	11.48%	19.11%	4.39%

Insider & Institutional Ownership

70.9% of Old Republic International shares are held by institutional investors. 1.0% of Old Republic International shares are held by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a stock will outperform the market over the long term.

Summary

Old Republic International beats The PMI Group on 9 of the 9 factors compared between the two stocks.

About The PMI Group

The PMI Group, Inc. (TPG) through its subsidiary PMI Mortgage Insurance Co. (MIC), and its affiliated companies (collectively PMI), provides residential mortgage insurance in the United States. During the year ended December 31, 2009, the Company operated in three business segments: United States Mortgage Insurance Operations, International Operations and Corporate and Other. As a United States residential mortgage insurer, PMI offers a variety of mortgage insurance products to meet the capital and credit risk mitigation needs of its customers. In November 2011, the Company announced that it has filed a voluntary petition for relief under Chapter 11 of the United States Bankruptcy Code in the United States Bankruptcy Court for the District of Delaware.

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.