NasdaqGS:DGIC.A

Stock Analysis Report

Executive Summary

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.

Rewards

Earnings are forecast to grow 11.61% per year

Became profitable this year

Pays a high and reliable dividend of 4.19%

Risk Analysis

No risks detected for DGIC.A from our risk checks.


Snowflake Analysis

Established dividend payer with questionable track record.


Similar Companies

Share Price & News

How has Donegal Group's share price performed over time and what events caused price changes?


Latest Share Price and Events

Stable Share Price: DGIC.A has not had significant price volatility in the past 3 months.


Market Performance


7 Day Return

0.2%

DGIC.A

2.1%

US Insurance

1.7%

US Market


1 Year Return

6.4%

DGIC.A

19.7%

US Insurance

23.6%

US Market

Return vs Industry: DGIC.A underperformed the US Insurance industry which returned 20.4% over the past year.

Return vs Market: DGIC.A underperformed the US Market which returned 24.7% over the past year.


Shareholder returns

DGIC.AIndustryMarket
7 Day0.2%2.1%1.7%
30 Day-2.6%1.6%3.5%
90 Day-0.6%4.8%11.7%
1 Year10.9%6.4%22.8%19.7%26.2%23.6%
3 Year-5.3%-15.6%37.5%26.8%53.2%43.3%
5 Year7.7%-10.7%74.8%53.7%75.5%56.1%

Price Volatility Vs. Market

How volatile is Donegal Group's share price compared to the market and industry in the last 5 years?


Simply Wall St News

No news available

Valuation

Is Donegal Group undervalued compared to its fair value and its price relative to the market?

20.41x

Price to Earnings (PE) ratio


Share Price vs. Fair Value

Below Fair Value: DGIC.A ($14.43) is trading above our estimate of fair value ($5.22)

Significantly Below Fair Value: DGIC.A is trading above our estimate of fair value.


Price To Earnings Ratio

PE vs Industry: DGIC.A is poor value based on its PE Ratio (19.3x) compared to the Insurance industry average (16.4x).

PE vs Market: DGIC.A is poor value based on its PE Ratio (19.3x) compared to the US market (18.9x).


Price to Earnings Growth Ratio

PEG Ratio: DGIC.A is poor value based on its PEG Ratio (1.7x)


Price to Book Ratio

PB vs Industry: DGIC.A is good value based on its PB Ratio (0.8x) compared to the US Insurance industry average (1.2x).


Next Steps

Future Growth

How is Donegal Group forecast to perform in the next 1 to 3 years based on estimates from 2 analysts?

11.6%

Forecasted annual earnings growth


Earnings and Revenue Growth Forecasts


Analyst Future Growth Forecasts

Earnings vs Savings Rate: DGIC.A's forecast earnings growth (11.6% per year) is above the savings rate (1.7%).

Earnings vs Market: DGIC.A's earnings (11.6% per year) are forecast to grow slower than the US market (14.3% per year).

High Growth Earnings: DGIC.A's earnings are forecast to grow, but not significantly.

Revenue vs Market: DGIC.A's revenue (3.2% per year) is forecast to grow slower than the US market (7.5% per year).

High Growth Revenue: DGIC.A's revenue (3.2% per year) is forecast to grow slower than 20% per year.


Earnings per Share Growth Forecasts


Future Return on Equity

Future ROE: DGIC.A's Return on Equity is forecast to be low in 3 years time (7.7%).


Next Steps

Past Performance

How has Donegal Group performed over the past 5 years?

-32.4%

Historical annual earnings growth


Earnings and Revenue History

Quality Earnings: DGIC.A has high quality earnings.

Growing Profit Margin: DGIC.A became profitable in the past.


Past Earnings Growth Analysis

Earnings Trend: DGIC.A's earnings have declined by -32.4% per year over the past 5 years.

Accelerating Growth: DGIC.A has become profitable in the last year, making the earnings growth rate difficult to compare to its 5-year average.

Earnings vs Industry: DGIC.A has become profitable in the last year, making it difficult to compare its past year earnings growth to the Insurance industry (-11.3%).


Return on Equity

High ROE: DGIC.A's Return on Equity (4.1%) is considered low.


Return on Assets


Return on Capital Employed


Next Steps

Financial Health

How is Donegal Group's financial position? (This company is analysed differently as a bank or financial institution)


Financial Position Analysis


Debt to Equity History and Analysis


Balance Sheet

Inventory Level: DGIC.A has a low level of unsold assets or inventory.

Debt Coverage by Assets: DGIC.A's debt is covered by short term assets (assets are 19.1x debt).


Financial Institutions Analysis

Asset Level: DGIC.A's level of assets compared to its equity is low.

Allowance for Bad Loans: Insufficient data to determine if DGIC.A has a sufficient allowance for bad loans.

Low Risk Liabilities: DGIC.A reports no customer deposits, loans are made up entirely of externally borrowed funds.

Loan Level: Insufficient data to determine if DGIC.A has an acceptable proportion of non-loan assets held.

Low Risk Deposits: DGIC.A has advanced significantly more loans than the customer deposits it holds.

Level of Bad Loans: Insufficient data to determine if DGIC.A has an appropriate level of bad loans.


Next Steps

Dividend

What is Donegal Group's current dividend yield, its reliability and sustainability?

3.95%

Current Dividend Yield


Upcoming Dividend Payment

Purchase Donegal Group before the 'Buy Limit' to receive their next dividend payment.


Dividend Yield vs Market

company4.0%marketbottom25%1.4%markettop25%3.7%industryaverage2.3%forecastin3Yearsn/a

Current dividend yield vs market & industry

Notable Dividend: DGIC.A's dividend (4.19%) is higher than the bottom 25% of dividend payers in the US market (1.4%).

High Dividend: DGIC.A's dividend (4.19%) is in the top 25% of dividend payers in the US market (3.66%)


Stability and Growth of Payments

Stable Dividend: DGIC.A's dividends per share have been stable in the past 10 years.

Growing Dividend: DGIC.A's dividend payments have increased over the past 10 years.


Current Payout to Shareholders

Dividend Coverage: At its current payout ratio (79.9%), DGIC.A's payments are covered by earnings.


Future Payout to Shareholders

Future Dividend Coverage: Insufficient data to determine if a dividend will be paid in 3 years and that it will be covered by earnings.


Next Steps

Management

What is the CEO of Donegal Group's salary, the management and board of directors tenure and is there insider trading?

7.0yrs

Average management tenure


CEO

Kevin Burke (53yo)

5.4yrs

Tenure

US$810,825

Compensation

Mr. Kevin Gerard Burke has been the Chief Executive Officer and President of Donegal Group Inc. since July 16, 2015. He is President of Peninsula Insurance Company and serves its Director since 2019. He is ...


CEO Compensation Analysis

Compensation vs Market: Kevin's total compensation ($USD810.83K) is below average for companies of similar size in the US market ($USD1.70M).

Compensation vs Earnings: Kevin's compensation has been consistent with company performance over the past year.


Management Age and Tenure

7.0yrs

Average Tenure

55yo

Average Age

Experienced Management: DGIC.A's management team is seasoned and experienced (7 years average tenure).


Board Age and Tenure

11.0yrs

Average Tenure

69yo

Average Age

Experienced Board: DGIC.A's board of directors are seasoned and experienced ( 11 years average tenure).


Insider Trading

Insider Buying: Insufficient data to determine if insiders have bought more shares than they have sold in the past 3 months.


Recent Insider Transactions

BuyUS$14,43004 Jun 19
Jack Hess
EntityIndividual
Role
Member of the Board of Directors
Independent Director
Shares1,000
Max PriceUS$14.43
BuyUS$27,84010 May 19
Jack Hess
EntityIndividual
Role
Member of the Board of Directors
Independent Director
Shares2,000
Max PriceUS$13.92
BuyUS$6,65527 Feb 19
Kevin Kraft
EntityIndividual
Role
Member of the Board of Directors
Director
Shares500
Max PriceUS$13.31

Ownership Breakdown

Dilution of Shares: Shareholders have not been meaningfully diluted in the past year.


Management Team

  • Dan Wagner (58yo)

    Senior VP & Treasurer

    • Tenure: 20yrs
    • Compensation: US$464.48k
  • Jeff Miller (55yo)

    Executive VP & CFO

    • Tenure: 14.8yrs
    • Compensation: US$607.78k
  • Sheri Smith

    VP & Corporate Secretary

    • Tenure: 7yrs
  • Vincent Viozzi

    Senior VP & Chief Investment Officer

    • Tenure: 8yrs
  • Sanjay Pandey (52yo)

    Senior VP & Chief Information Officer

    • Tenure: 11yrs
    • Compensation: US$465.53k
  • Kevin Burke (53yo)

    President

    • Tenure: 5.4yrs
    • Compensation: US$810.83k
  • Jason Crumbling

    VP & Controller

    • Christina Hoffman

      Senior Vice President

      • Tenure: 7yrs
    • Richard Kelley (64yo)

      Senior VP & Head of Field Operations

      • Tenure: 1.8yrs
      • Compensation: US$601.01k
    • Robert Long

      Senior VP & General Counsel

      • Tenure: 2yrs

    Board Members

    • Robert Bolinger (82yo)

      Independent Director

      • Tenure: 33.8yrs
      • Compensation: US$101.17k
    • Patricia Gilmartin (79yo)

      Director

      • Tenure: 33.8yrs
      • Compensation: US$99.62k
    • Jon Mahan (49yo)

      Independent Director

      • Tenure: 13yrs
      • Compensation: US$112.17k
    • Richard Wampler (78yo)

      Independent Director

      • Tenure: 15yrs
      • Compensation: US$108.37k
    • Trez Moore (65yo)

      Independent Director

      • Tenure: 12yrs
      • Compensation: US$94.52k
    • Scott Berlucchi (61yo)

      Director

      • Tenure: 6.8yrs
      • Compensation: US$100.82k
    • Kevin Kraft (67yo)

      Director

      • Tenure: 10.1yrs
      • Compensation: US$114.17k
    • Dennis Bixenman (72yo)

      Director

      • Tenure: 1.8yrs
      • Compensation: US$109.67k
    • Jack Hess (71yo)

      Independent Director

      • Tenure: 8.8yrs
      • Compensation: US$105.47k
    • Kevin Burke (53yo)

      President

      • Tenure: 5.4yrs
      • Compensation: US$810.83k

    Company Information

    Donegal Group Inc.'s company bio, employee growth, exchange listings and data sources


    Key Information

    • Name: Donegal Group Inc.
    • Ticker: DGIC.A
    • Exchange: NasdaqGS
    • Founded: 1986
    • Industry: Property and Casualty Insurance
    • Sector: Insurance
    • Market Cap: US$405.137m
    • Shares outstanding: 28.68m
    • Website: https://www.donegalgroup.com

    Location

    • Donegal Group Inc.
    • 1195 River Road
    • Marietta
    • Pennsylvania
    • 17547
    • United States

    Listings

    TickerExchangePrimary SecuritySecurity TypeCountryCurrencyListed on
    DGIC.BNasdaqGS (Nasdaq Global Select)YesClass B Common StockUSUSDOct 1986
    DGIC.ANasdaqGS (Nasdaq Global Select)Class A Common StockUSUSDApr 2001

    Biography

    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, Commercial Lines of Insurance, and Investment in DFSC. 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. Donegal Group Inc. is a subsidiary of Donegal Mutual Insurance Company. 


    Company Analysis and Financial Data Status

    All financial data provided by Standard & Poor's Capital IQ.
    DataLast Updated (UTC time)
    Company Analysis2020/01/19 23:34
    End of Day Share Price2020/01/17 00:00
    Earnings2019/09/30
    Annual Earnings2018/12/31


    Unless specified all financial data is based on a yearly period but updated quarterly. This is known as Trailing Twelve Month (TTM) or Last Twelve Month (LTM) Data. Learn more here.