Reviewing Donegal Group (NASDAQ:DGICB) and RenaissanceRe (NYSE:RNR)

Donegal Group (NASDAQ:DGICB) and RenaissanceRe (NYSE:RNR) are both finance companies, but which is the superior stock? We will contrast the two companies based on the strength of their valuation, dividends, earnings, analyst recommendations, profitability, institutional ownership and risk.

Risk and Volatility

Donegal Group has a beta of 0.04, indicating that its share price is 96% less volatile than the S&P 500. Comparatively, RenaissanceRe has a beta of 0.17, indicating that its share price is 83% less volatile than the S&P 500.

Dividends

Donegal Group pays an annual dividend of $0.70 per share and has a dividend yield of 2.8%. RenaissanceRe pays an annual dividend of $1.64 per share and has a dividend yield of 0.5%. Donegal Group pays out 39.3% of its earnings in the form of a dividend. RenaissanceRe pays out 2.8% of its earnings in the form of a dividend. Both companies have healthy payout ratios and should be able to cover their dividend payments with earnings for the next several years. Donegal Group has increased its dividend for 5 consecutive years and RenaissanceRe has increased its dividend for 30 consecutive years.

Profitability

This table compares Donegal Group and RenaissanceRe’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Donegal Group	7.38%	10.65%	2.83%
RenaissanceRe	23.65%	23.10%	4.62%

Valuation & Earnings

This table compares Donegal Group and RenaissanceRe”s revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Donegal Group	$978.01 million	0.94	$79.34 million	$1.78	13.90
RenaissanceRe	$12.85 billion	1.07	$2.68 billion	$58.27	5.66

RenaissanceRe has higher revenue and earnings than Donegal Group. RenaissanceRe is trading at a lower price-to-earnings ratio than Donegal Group, indicating that it is currently the more affordable of the two stocks.

Insider and Institutional Ownership

1.2% of Donegal Group shares are held by institutional investors. Comparatively, 100.0% of RenaissanceRe shares are held by institutional investors. 8.6% of Donegal Group shares are held by insiders. Comparatively, 2.3% of RenaissanceRe shares are held by insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a company will outperform the market over the long term.

Analyst Ratings

This is a summary of recent ratings and price targets for Donegal Group and RenaissanceRe, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Donegal Group	0	1	0	0	2.00
RenaissanceRe	1	11	5	0	2.24

RenaissanceRe has a consensus target price of $336.33, suggesting a potential upside of 1.93%. Given RenaissanceRe’s stronger consensus rating and higher probable upside, analysts clearly believe RenaissanceRe is more favorable than Donegal Group.

Summary

RenaissanceRe beats Donegal Group on 14 of the 17 factors compared between the two stocks.

About Donegal Group

Donegal Group Inc., an insurance holding company, provides personal and commercial lines of property and casualty insurance to businesses and individuals in the Mid-Atlantic, Midwestern, New England, and southern states. It operates through four 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. It also offers homeowners policies, which provide coverage for damage to residences and their contents from a range of perils, including fire, lightning, windstorm, and theft; and liability of the insured arising from injury to other persons or their property. In addition, the company 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 various perils, primarily 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 through a network of approximately 2,400 independent insurance agencies. Donegal Group Inc. was founded in 1986 and is headquartered in Marietta, Pennsylvania.

About RenaissanceRe

RenaissanceRe Holdings Ltd., together with its subsidiaries, provides reinsurance and insurance products in the United States and internationally. The company operates through Property, and Casualty and Specialty segments. The Property segment writes property catastrophe excess of loss reinsurance and excess of loss reinsurance to insure insurance and reinsurance companies against natural and man-made catastrophes, including hurricanes, earthquakes, typhoons, and tsunamis, as well as winter storms, freezes, floods, fires, windstorms, tornadoes, explosions, and acts of terrorism; and other property class of products, such as proportional reinsurance, property per risk, property reinsurance, binding facilities, and regional U.S. multi-line reinsurance. The Casualty and Specialty segment writes various classes of products, such as directors and officers, medical malpractice, and professional indemnity; automobile and employer’s liability, casualty clash, umbrella or excess casualty, workers’ compensation, and general liability; financial and mortgage guaranty, political risk, surety, and trade credit; and accident and health, agriculture, aviation, cyber, energy, marine, satellite, and terrorism. It distributes products and services primarily through intermediaries. The company invests in and manages funds. RenaissanceRe Holdings Ltd. was founded in 1993 and is headquartered in Pembroke, Bermuda.