Donegal Group (DGICA) AI Stock Analysis

• Market Cap: $711.74M
• Dividend Yield: 3.66%
• Average Volume (3M): 144.32K
• Price to Earnings (P/E): 9.8
• Beta (1Y): 0.16
• Revenue Growth: 5.29%
• EPS Growth: 1200.44%
• Country: US
• Employees: 410
• Sector: Financial
• Sector Strength: 78
• Industry: Insurance - Property & Casualty
• EPS (TTM): 0.72
• Shares Outstanding: 30,519,896
• 10 Day Avg. Volume: 226,670
• 30 Day Avg. Volume: 144,320
• PEG Ratio: 2.12
• Price to Book (P/B): 0.92
• Price to Sales (P/S): 0.00
• P/FCF Ratio: 4.68
• Enterprise Value/Market Cap: 0.64
• Enterprise Value/Revenue: 0.12
• Enterprise Value/Gross Profit: 0.46
• Enterprise Value/Ebitda: 2.21
• 1Y Price Target: $18.00
• Price Target Upside: -9.73% Downside
• Rating Consensus: Hold
• Number of Analyst Covering: 1

• Rating: 74 Outperform
• Price Target: ―

Donegal Group shows strong technical momentum and reasonable valuation, bolstered by positive earnings call sentiment and strategic dividend increases. However, challenges with profitability and fluctuating cash flow growth limit the score. The company is financially stable, but profitability and operational efficiency need improvement.

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 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 approximately 2,300 independent insurance agencies. Donegal Group Inc. was incorporated in 1986 and is headquartered in Marietta, Pennsylvania.

How the Company Makes Money

Donegal Group Inc. generates revenue primarily through the underwriting and sale of insurance policies. The company earns money by collecting premiums from policyholders in exchange for providing insurance coverage. Its key revenue streams include personal lines of insurance, such as automobile and homeowners insurance, and commercial lines, including commercial multi-peril and workers' compensation insurance. Donegal Group also invests the premiums it collects in a portfolio of fixed-income securities, which provides investment income. The company's partnerships with independent insurance agents are significant as they help distribute its products and expand its market reach. Additionally, effective risk management and claims handling are crucial factors that contribute to Donegal Group's profitability.

Donegal Group Financial Statement Overview

Summary

Donegal Group exhibits financial resilience with a strong equity position and consistent revenue growth. However, profitability remains a concern due to volatile net income margins. Cash flow generation is positive, but growth is erratic, requiring attention to cash conversion efficiency.

Income Statement

The income statement shows a mixed performance with steady revenue growth over the years, albeit from a low base. The gross profit margin is consistently high due to the nature of the insurance industry. However, the net profit margin is quite low and volatile, with periods of negative net income, reflecting profitability challenges.

Balance Sheet

The balance sheet indicates a strong equity base with a manageable debt-to-equity ratio, suggesting financial stability. The company maintains a healthy equity ratio, indicating a solid financial foundation. However, the return on equity is inconsistent due to fluctuating net income.

Cash Flow

Cash flow analysis reveals a positive operating cash flow, which is a good sign of operational efficiency. However, the free cash flow growth rate is inconsistent, and the cash flow ratios indicate potential challenges in converting earnings into cash.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	993.64M	989.61M	927.34M	848.22M	816.47M	777.82M
Gross Profit	993.64M	989.61M	927.34M	848.22M	816.47M	777.82M
EBITDA	90.97M	67.16M	10.01M	1.82M	37.07M	71.19M
Net Income	70.11M	50.86M	4.43M	-1.96M	25.25M	52.82M
Balance Sheet
Total Assets	2.37B	2.34B	2.27B	2.24B	2.26B	2.16B
Cash, Cash Equivalents and Short-Term Investments	0.00	401.92M	645.45M	606.24M	603.03M	679.13M
Total Debt	35.00M	35.00B	35.00M	35.00M	35.00M	90.00M
Total Liabilities	1.78B	1.21B	1.79B	1.76B	1.72B	1.64B
Stockholders Equity	584.72M	545.78M	479.75M	483.59M	531.04M	517.77M
Cash Flow
Free Cash Flow	88.37M	67.44M	28.58M	67.11M	76.73M	101.04M
Operating Cash Flow	88.37M	67.44M	28.62M	67.11M	76.73M	101.13M
Investing Cash Flow	-59.14M	-48.04M	-16.71M	-98.50M	-62.20M	-99.68M
Financing Cash Flow	15.28M	9.73M	-13.25M	-1.20M	-59.92M	52.32M

Donegal Group Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 19.94
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Negative
• RSI: Neutral
• STOCH: Negative

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 19.94 is above the 20-day moving average (MA) of 19.45, above the 50-day MA of 19.56, and above the 200-day MA of 16.76, indicating a bullish trend. The MACD of -0.02 indicates Negative momentum. The RSI at 57.20 is Neutral, neither overbought nor oversold. The STOCH value of 85.47 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for DGICA.

Donegal Group Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
UFCS	79 Outperform	$725.35M	11.23	8.51%	2.25%	14.60%	―
UVE	78 Outperform	$776.51M	12.08	16.95%	2.32%	7.24%	-9.28%
HRTG	76 Outperform	$726.17M	9.26	27.59%	―	11.41%	53.85%
DGICA	74 Outperform	$711.74M	9.75	13.11%	3.66%	5.29%	1200.44%
GBLI	72 Outperform	$463.13M	16.24	4.14%	4.32%	-10.61%	-19.48%
ACIC	61 Neutral	$516.90M	7.05	31.11%	―	12.19%	5.12%
Sector *	60 Neutral	C$14.55B	5.45	20.17%	6.14%	26.88%	-38.18%

Donegal Group Corporate Events

Donegal Group Increases Quarterly Cash Dividends

On April 17, 2025, Donegal Group Inc. announced an increase in its quarterly cash dividends, with Class A common stock dividends rising by 5.8% and Class B by 6.5%. This move reflects the company’s strategic focus on financial performance and stakeholder value, with dividends payable on May 15, 2025, to stockholders recorded by May 1, 2025.