The real estate market is still sluggish. Title insurance companies, which verify a seller’s title and make sure that it’s problem-free, are having a challenging year. Of the four firms that control 65 percent of the title insurance market, only Fidelity National Financial (FNF) stock posted a positive return (21.3 percent) so far this year. Competitors such as First American Financial (FAF), Old Republic International (ORI), and Stewart Information Services (STC) all dipped into negative territory.

Fidelity National Financial is the nation’s largest title insurance company. It also sells mortgage services, specialty insurance, and diversified services. Second quarter profit fell 42 percent to 36 cents per share versus 61 cents a year ago, though that quarter’s results were pumped up by the sale of a subsidiary. Revenues fell to $1.3 billion versus $1.5 billion a year ago.

But the Florida company has an ace in the hole: rebounding commercial real estate sales, which rose 38 percent. “We are strongly encouraged by this trend,” said Fidelity National Financial CEO George Scanlon. When the real estate market stabilizes, he believes that title insurance can “produce significantly higher earnings.”

One of the niches’ most generous dividends, 2.9 percent, also helps.

Headwinds to come

Of the five analysts followed by Thomson/First Call, one has a buy recommendation on the title insurance company with four holds.

RBC Capital rates the stock outperform, citing its high revenue commercial business and double-digit operating margins. Analysts also note an uncertain picture long term, though, as the housing market shows no signs of recovery. The company next reports on or about Oct. 19.