Donegal (DGICA)
NASDAQ:DGICA
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Donegal Group
(NASDAQ:DGICA)
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Rating:71Outperform
Price Target:
$19.00
▲(6.44% Upside)
Action:Upgraded
Date:05/10/26
DGICA scores well primarily on strengthened fundamentals (low leverage, improved profitability, and solid earnings-to-cash conversion). The score is tempered by weak/uncertain top-line momentum and only neutral technical signals, while valuation and a strong dividend yield provide meaningful support.
Positive Factors
Balance Sheet Strength
Very low leverage and materially strengthened equity provide durable capital cushioning for underwriting volatility and catastrophes. This conservative capital structure supports dividend increases, strategic investments (IT modernization) and reinsurance programs without materially impairing financial flexibility over the next 2–6 months.
Negative Factors
Weak Top-Line / Personal Lines Decline
Material declines in earned and written personal premiums reduce scale and revenue diversification, pressuring long-term premium growth. A smaller premium base magnifies expense ratio volatility, limits underwriting leverage and slows margin recovery unless new-business trends or retention materially improve over the next several quarters.
Read all positive and negative factors
Positive Factors
Negative Factors
Balance Sheet Strength
Very low leverage and materially strengthened equity provide durable capital cushioning for underwriting volatility and catastrophes. This conservative capital structure supports dividend increases, strategic investments (IT modernization) and reinsurance programs without materially impairing financial flexibility over the next 2–6 months.
Read all positive factors
Donegal Group (DGICA) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$643.67M
Dividend Yield3.51%
Average Volume (3M)111.31K
Price to Earnings (P/E)13.6
Beta (1Y)0.34
Revenue Growth-2.46%
EPS Growth-11.49%
CountryUS
Employees410
SectorFinancial
Sector Strength70
IndustryInsurance - Property & Casualty
Share Statistics
EPS (TTM)1.83
Shares Outstanding31,426,190
10 Day Avg. Volume129,696
30 Day Avg. Volume111,308
Financial Highlights & Ratios
PEG Ratio0.18
Price to Book (P/B)0.96
Price to Sales (P/S)0.63
P/FCF Ratio8.75
Enterprise Value/Market Cap0.99
Enterprise Value/Revenue0.66
Enterprise Value/Gross Profit2.26
Enterprise Value/Ebitda7.59
Forecast
1Y Price Target
$18.00Price Target Upside0.84% Upside
Rating ConsensusHold
Number of Analyst Covering1
EPS Forecast (FY)1.8
Revenue Forecast (FY)$901.98M
Donegal Group Business Overview & Revenue Model
Company Description
Donegal Group Inc., an insurance holding company, provides personal and commercial lines of property and casualty insurance to businesses and individuals. It operates through three segments: Investment Function, Personal Lines of Insurance, and Co...
How the Company Makes Money
Donegal Group makes money primarily through (1) underwriting property-and-casualty insurance and (2) investing the funds it holds from policyholders ("float"). Underwriting revenue is generated from insurance premiums charged on policies across co...
Donegal Group Earnings Call Summary
Earnings Call Date:Feb 19, 2026
(Q4-2025)
| % Change Since: |
Next Earnings Date:Jul 23, 2026
Earnings Call Sentiment Positive
The call emphasized strong full-year financial results and several strategic achievements — notably a record $79.3M net income (up 56%), improved full-year combined ratio (95.4% vs 98.6%), meaningful investment income and yield enhancements, progress on technology modernization, and disciplined commercial rate gains. Offsetting these positives were material declines in personal lines premiums (NPW down ~13.6% for the year), elevated Q4 weather and large-fire impacts, some adverse reserve development in specific commercial lines, a Q4 increase in the expense ratio driven by higher agency incentives and lower premium volume, and a Q4 drop in quarterly net income versus 2024. Overall, the company presents strong underlying profitability and balance-sheet gains, while acknowledging the need to restore quality premium growth and manage specific loss drivers.Positive Updates
Record Full-Year Net Income
Net income for full year 2025 was $79,300,000, the highest in company history, a 56% increase versus $50,900,000 in 2024.
Negative Updates
Decline in Net Premiums Earned and Written (Personal Lines Pressure)
Net premiums earned for Q4 were $226,900,000, down 4.1% year-over-year; net premiums written decreased 3.4%. Personal lines net premiums written declined 12.7% in Q4 and 13.6% for the full year, reflecting lower new business volume and intentional nonrenewals.
Read all updates
Q4-2025 Updates
Positive
Negative
Record Full-Year Net Income
Net income for full year 2025 was $79,300,000, the highest in company history, a 56% increase versus $50,900,000 in 2024.
Read all positive updates
Company Guidance
The company’s guidance for 2026 emphasizes profitable growth and continued modernization: management plans to drive higher new-business submissions (particularly in commercial lines) through increased engagement with its ~2,000 independent agencies while maintaining pricing discipline (2025 rate increases averaged 5.9% overall and 6.6% excluding workers’ comp; commercial rate/exposure increases were 9.7% in Q4 and 10.6% for the full year; personal lines rate +2.9% Q4 / +3.6% FY) and preserving strong retention (real retention 88.7% in Q4); operationally, legacy policy conversions will be completed by mid‑2027 and Guidewire claims/billing/cloud migration is planned for early 2027 to enable GenAI capabilities; on reinsurance they kept 2026 limits/retentions unchanged and project a ~$3.0 million reduction in reinsurance cost versus 2025; on investments they expect roughly $100.0 million of portfolio cash flow over the next 12 months with a current average yield of 4.4%, a reinvestment rate ~5.25% (new money “north of 5%”), a 5.5‑year duration, and noted that $155.0 million of fourth‑quarter proceeds were reinvested at an average 5.17% (projected to add ~$2.2 million of annual investment income).Donegal Group Financial Statement Overview
Summary
Income Statement
67
Positive
Balance Sheet
86
Very Positive
Cash Flow
72
Positive
| Breakdown | TTM | Dec 2025 | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 |
|---|---|---|---|---|---|---|
Income Statement | ||||||
| Total Revenue | 969.21M | 978.01M | 989.61M | 927.34M | 848.22M | 816.47M |
| Gross Profit | 281.35M | 260.90M | 225.18M | 163.95M | 141.71M | 167.02M |
| EBITDA | 83.96M | 102.02M | 67.16M | 10.01M | 1.82M | 37.07M |
| Net Income | 65.65M | 79.34M | 50.86M | 4.43M | -1.96M | 25.25M |
Balance Sheet | ||||||
| Total Assets | 2.45B | 2.39B | 2.34B | 2.27B | 2.24B | 2.26B |
| Cash, Cash Equivalents and Short-Term Investments | 35.50M | 521.17M | 695.38M | 645.45M | 606.24M | 603.03M |
| Total Debt | 35.00M | 35.00M | 35.00M | 35.00M | 35.00M | 35.00M |
| Total Liabilities | 1.20B | 1.75B | 1.79B | 1.79B | 1.76B | 1.72B |
| Stockholders Equity | 649.09M | 640.42M | 545.78M | 479.75M | 483.59M | 531.04M |
Cash Flow | ||||||
| Free Cash Flow | 64.62M | 70.20M | 67.44M | 28.58M | 67.11M | 76.73M |
| Operating Cash Flow | 64.62M | 70.20M | 67.44M | 28.62M | 67.11M | 76.73M |
| Investing Cash Flow | -81.63M | -91.13M | -48.04M | -16.71M | -98.50M | -62.20M |
| Financing Cash Flow | -11.81M | -5.21M | 9.73M | -13.25M | -1.20M | -59.92M |
Donegal Group Technical Analysis
Positive
17.85
Price Trends
17.02
Positive
17.72
Negative
18.14
Negative
Market Momentum
0.02
Negative
55.96
Neutral
78.52
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For DGICA, the sentiment is Positive. The current price of 17.85 is above the 20-day moving average (MA) of 17.10, above the 50-day MA of 17.02, and below the 200-day MA of 18.14, indicating a neutral trend. The MACD of 0.02 indicates Negative momentum. The RSI at 55.96 is Neutral, neither overbought nor oversold. The STOCH value of 78.52 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for DGICA.
Donegal Group Risk Analysis
Donegal Group disclosed 23 risk factors in its most recent earnings report. Donegal Group reported the most risks in the "Production" category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 0 New Risks
Donegal Group Peers Comparison
UnderperformOutperform
Sector (68)
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
82 Outperform | $1.08B | 4.38 | 37.50% | 2.18% | 3.57% | 198.87% | |
79 Outperform | $1.26B | 7.88 | 14.36% | 1.73% | 10.58% | 96.22% | |
74 Outperform | $710.80M | 5.52 | 43.68% | ― | 1.25% | 157.31% | |
71 Outperform | $643.67M | 13.60 | 10.41% | 3.51% | -2.46% | -11.49% | |
68 Neutral | $1.06B | -18.38 | 7.16% | 4.59% | 10.67% | -13.23% | |
68 Neutral | $18.00B | 11.42 | 9.92% | 3.81% | 9.73% | 1.22% | |
63 Neutral | $536.01M | 7.09 | 33.02% | ― | 10.65% | 39.18% |
* Financial Sector Average
DGICA
Donegal Group
17.40
-2.37
-11.98%
SAFT
Safety Insurance Group
72.73
-6.68
-8.41%
UFCS
United Fire Group
48.32
20.48
73.57%
UVE
Universal Insurance Holdings
39.43
13.51
52.12%
ACIC
American Coastal Insurance
11.06
0.54
5.17%
HRTG
Heritage Insurance Holdings
23.15
-1.59
-6.43%
Donegal Group Corporate Events
Executive/Board ChangesShareholder Meetings
Donegal Group Stockholders Approve Directors, Pay and Auditor
Positive
Apr 17, 2026
Donegal Group reported the results of its annual stockholders meeting held on April 16, 2026, where 8,165,424 votes were represented out of 8,719,393 eligible, reflecting strong shareholder participation. Stockholders elected Kevin G. Burke, David...
Dividends
Donegal Group Increases Quarterly Dividend for Class A and B
Positive
Apr 16, 2026
On April 16, 2026, Donegal Group Inc. announced that its board of directors approved an increase in the regular quarterly cash dividend to $0.1925 per share for Class A common stock and $0.175 per share for Class B common stock. The dividends, whi...
Financial Disclosures
Donegal Group Schedules First-Quarter 2026 Earnings Release
Neutral
Apr 6, 2026
Donegal Group Inc., a regional property and casualty insurance holding company operating in 21 U.S. states through the A.M. Best A-rated Donegal Insurance Group, trades its Class A and B common stock on the NASDAQ Global Select Market under the sy...
Glossary
BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.