Financial Review: Donegal Group (DGICA) & Its Rivals

Donegal Group (NASDAQ:DGICA) is one of 311 public companies in the “Insurance” industry, but how does it contrast to its rivals? We will compare Donegal Group to similar businesses based on the strength of its earnings, analyst recommendations, valuation, risk, dividends, profitability and institutional ownership.

Insider and Institutional Ownership

28.0% of Donegal Group shares are owned by institutional investors. Comparatively, 55.8% of shares of all “Insurance” companies are owned by institutional investors. 2.8% of Donegal Group shares are owned by company insiders. Comparatively, 13.6% of shares of all “Insurance” companies are owned by company insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a company will outperform the market over the long term.

Dividends

Donegal Group pays an annual dividend of $0.77 per share and has a dividend yield of 4.1%. Donegal Group pays out 41.2% of its earnings in the form of a dividend. As a group, “Insurance” companies pay a dividend yield of 2.9% and pay out 31.0% of their earnings in the form of a dividend. Donegal Group has increased its dividend for 5 consecutive years.

Analyst Ratings

This is a breakdown of recent recommendations and price targets for Donegal Group and its rivals, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Donegal Group	0	2	1	0	2.33
Donegal Group Competitors	3336	15674	16522	741	2.40

Donegal Group presently has a consensus target price of $20.00, suggesting a potential upside of 6.78%. As a group, “Insurance” companies have a potential upside of 5.98%. Given Donegal Group’s higher probable upside, analysts plainly believe Donegal Group is more favorable than its rivals.

Profitability

This table compares Donegal Group and its rivals’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Donegal Group	7.24%	10.49%	2.80%
Donegal Group Competitors	9.15%	-9.84%	4.10%

Risk & Volatility

Donegal Group has a beta of -0.03, meaning that its stock price is 103% less volatile than the S&P 500. Comparatively, Donegal Group’s rivals have a beta of -1.59, meaning that their average stock price is 259% less volatile than the S&P 500.

Valuation and Earnings

This table compares Donegal Group and its rivals gross revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Net Income	Price/Earnings Ratio
Donegal Group	$954.92 million	$79.34 million	10.02
Donegal Group Competitors	$15.54 billion	$1.70 billion	34.38

Donegal Group’s rivals have higher revenue and earnings than Donegal Group. Donegal Group is trading at a lower price-to-earnings ratio than its rivals, indicating that it is currently more affordable than other companies in its industry.

Summary

Donegal Group rivals beat Donegal Group on 11 of the 15 factors compared.

Donegal Group Company Profile

Donegal Group Inc., an insurance holding company, provides property and casualty insurance to businesses and individuals. It operates through three segments: Investment Function, Personal Lines of Insurance, and Commercial Lines of Insurance. The company offers private passenger automobile policies that provide protection against liability for bodily injury and property damage arising from automobile accidents, as well as protection against loss from damage to automobiles; and homeowners policies, which provide coverage for damage to residences and their contents from a range of perils, including fire, lightning, windstorm, and theft, as well as liability of the insured arising from injury to other persons or their property. It also offers commercial automobile policies that provide protection against liability for bodily injury and property damage arising from automobile accidents and protection against loss from damage to automobiles owned by the insured; commercial multi-peril policies that provide protection to businesses against combining liability and physical damage coverages; and workers’ compensation policies, which provide benefits to employees for injuries sustained during employment. The company markets its insurance products primarily to Mid-Atlantic, Midwestern, New England, Southern, and Southwestern regions through independent insurance agencies. Donegal Group Inc. was incorporated in 1986 and is based in Marietta, Pennsylvania. Donegal Group Inc. operates as a subsidiary of Donegal Mutual Insurance Company.