Donegal Group (DGICA) AI Stock Analysis

• Market Cap: $651.34M
• Dividend Yield: 3.51%
• Average Volume (3M): 94.46K
• Price to Earnings (P/E): 7.5
• Beta (1Y): 0.20
• Revenue Growth: 0.93%
• EPS Growth: 224.95%
• Country: US
• Employees: 410
• Sector: Financial
• Sector Strength: 70
• Industry: Insurance - Property & Casualty
• EPS (TTM): 0.52
• Shares Outstanding: 31,064,787
• 10 Day Avg. Volume: 105,863
• 30 Day Avg. Volume: 94,463
• PEG Ratio: 0.01
• Price to Book (P/B): 0.94
• Price to Sales (P/S): 0.52
• P/FCF Ratio: 7.57
• Enterprise Value/Market Cap: 0.99
• Enterprise Value/Revenue: 0.65
• Enterprise Value/Gross Profit: 1.45
• Enterprise Value/Ebitda: 5.81
• 1Y Price Target: $21.00
• Price Target Upside: 15.64% Upside
• Rating Consensus: Hold
• Number of Analyst Covering: 1
• EPS Forecast (FY): N/A
• Revenue Forecast (FY): N/A

• Rating: 69 Neutral
• Price Target: $20.00 ▲(10.13% Upside)

The score is driven primarily by sound financial health (profitability and cash flow strength despite weaker revenue growth) and attractive valuation (low P/E and solid dividend yield). Technical signals are neutral-to-mildly positive, while recent corporate actions (dividend and incentive alignment) add a modest positive offset.

Positive Factors

Strong free cash flow conversion

Nearly one-to-one conversion of net income into free cash flow indicates durable cash generation ability. This sustains dividend payments, funds reserve strengthening and working capital needs, reduces reliance on external financing, and provides capital flexibility through underwriting cycles.

Healthy underwriting profitability

Consistent net and EBIT margins reflect disciplined underwriting and expense control, creating a margin buffer versus claim volatility. Sustainable margins support reinvestment in distribution, steady earnings, and resilience to adverse loss periods over the medium term.

Conservative balance sheet leverage

Low leverage provides long-term financial stability, easing regulatory capital pressures and preserving ratings. Conservative debt levels allow the company to absorb underwriting losses, pursue opportunistic growth or M&A, and maintain reserve strength without forcing dilutive capital raises.

Negative Factors

Slowing revenue/premium growth

A slowing top-line trend constrains long-term earnings expansion and the ability to scale fixed costs. For a P&C insurer, weaker premium growth can limit underwriting diversification and reduce leverage on operating expenses, making it harder to improve ROE and shareholder returns over several quarters.

Only moderate return on equity

A mid-teens ROE implies limited capital efficiency relative to higher-performing insurers. Over time, moderate ROE can constrain total shareholder returns and signal room to enhance underwriting discipline, pricing or capital allocation to drive better long-run profitability per unit of capital.

Broad discretion in executive incentives

While performance-based plans align pay to targets, broad committee discretion and adjustment clauses can weaken strict pay-for-performance. Over time this may dilute accountability, reduce transparency for investors, and lessen incentives for consistent achievement of combined-ratio and premium-growth goals.

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 generates revenue primarily through the collection of premiums from its insurance policies. The company offers various insurance products, including auto, home, and commercial insurance, which contribute to its core revenue streams. Additionally, Donegal Group earns money from investment income generated from its reserves, which are invested in fixed-income securities and equities. The company has established significant partnerships with independent agents who help distribute its insurance products, expanding its market reach. Overall, the combination of premium collections, investment income, and strategic distribution partnerships plays a crucial role in Donegal Group's financial performance.

Donegal Group Financial Statement Overview

Summary

Solid profitability and cash generation support the score (net margin 8.72%, EBIT margin 10.89%, and strong recent free cash flow conversion), but slowing revenue growth and only moderate ROE (14.58%) limit upside.

Income Statement

The income statement shows a mixed performance. The TTM data indicates a decline in revenue growth rate, which is concerning. However, the company maintains a healthy net profit margin of 8.72% and an EBIT margin of 10.89%, reflecting strong profitability. Historical data shows fluctuating revenue growth, with a notable improvement in net profit margin from previous years.

Balance Sheet

The balance sheet reveals a stable financial structure with a low debt-to-equity ratio, indicating conservative leverage. However, the return on equity at 14.58% in the TTM period is moderate, suggesting room for improvement in generating returns for shareholders. The equity ratio is not provided, but the overall asset base appears stable.

Cash Flow

Cash flow analysis shows a robust free cash flow growth rate in the TTM period, indicating strong cash generation capabilities. The free cash flow to net income ratio is nearly 1, suggesting efficient conversion of income to cash. Historical data shows variability in cash flow growth, but the recent performance is positive.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	988.19M	989.61M	927.34M	848.22M	816.47M	777.82M
Gross Profit	446.58M	989.61M	927.34M	848.22M	816.47M	777.82M
EBITDA	111.23M	67.16M	10.01M	1.82M	37.07M	71.19M
Net Income	86.15M	50.86M	4.43M	-1.96M	25.25M	52.82M
Balance Sheet
Total Assets	2.42B	2.34B	2.27B	2.24B	2.26B	2.16B
Cash, Cash Equivalents and Short-Term Investments	512.38M	401.92M	645.45M	606.24M	603.03M	679.13M
Total Debt	35.00M	35.00M	35.00M	35.00M	35.00M	90.00M
Total Liabilities	1.79B	1.79B	1.79B	1.76B	1.72B	1.64B
Stockholders Equity	627.44M	545.78M	479.75M	483.59M	531.04M	517.77M
Cash Flow
Free Cash Flow	88.43M	67.44M	28.58M	67.11M	76.73M	101.04M
Operating Cash Flow	88.43M	67.44M	28.62M	67.11M	76.73M	101.13M
Investing Cash Flow	-96.23M	-48.04M	-16.71M	-98.50M	-62.20M	-99.68M
Financing Cash Flow	17.72M	9.73M	-13.25M	-1.20M	-59.92M	52.32M

Donegal Group Technical Analysis

• Technical Analysis Sentiment: Negative
• Last Price: 18.16
• 50DMA: Negative
• 100DMA: Negative
• 200DMA: Negative
• MACD: Positive
• RSI: Neutral
• STOCH: Positive

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For DGICA, the sentiment is Negative. The current price of 18.16 is below the 20-day moving average (MA) of 19.27, below the 50-day MA of 19.75, and below the 200-day MA of 18.91, indicating a bearish trend. The MACD of -0.44 indicates Positive momentum. The RSI at 32.74 is Neutral, neither overbought nor oversold. The STOCH value of 9.67 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for DGICA.

Donegal Group Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
SAFT	75 Outperform	$1.13B	12.92	9.97%	4.59%	13.35%	16.56%
HRTG	72 Outperform	$785.15M	5.33	41.64%	―	5.92%	93.02%
UFCS	71 Outperform	$888.15M	8.21	13.21%	1.73%	12.22%	120.73%
UVE	70 Outperform	$820.15M	6.90	27.34%	2.18%	4.61%	73.40%
DGICA	69 Neutral	$651.34M	7.49	15.10%	3.51%	0.93%	224.95%
Sector *	68 Neutral	$18.00B	11.42	9.92%	3.81%	9.73%	1.22%
ACIC	65 Neutral	$529.10M	6.24	29.35%	―	16.34%	-1.26%

Donegal Group Corporate Events

Donegal Group Schedules Q4 and Full-Year 2025 Results

On January 29, 2026, Donegal Group Inc. announced it will release its financial results for the fourth quarter and full year ended December 31, 2025, before the market opens on Thursday, February 19, 2026, and will post a supplemental investor presentation on its website at the same time. The company also plans to provide a pre-recorded audio webcast with commentary from senior management and a follow-on Q&A session, signaling an effort to enhance transparency and engagement with investors around its year-end performance and strategic progress.

The most recent analyst rating on (DGICA) stock is a Hold with a $21.00 price target. To see the full list of analyst forecasts on Donegal Group stock, see the DGICA Stock Forecast page.

Donegal Group Adopts New Performance-Based Executive Incentive Plans

On December 18, 2025, Donegal Group Inc.’s board of directors approved new Annual Executive Incentive and Long-Term Executive Incentive Plans that set performance-based bonus opportunities for its president, chief executive officer and other named executive officers tied to the fiscal year 2026 and the 2026–2028 period. The annual plan links executive bonuses to achieving target commercial lines premium growth, statutory combined ratio objectives for Donegal Insurance Group, and a target operating return on equity for the company, while the long-term plan ties payouts to a target average statutory combined ratio over three years and includes a 25% reduction if executives fail to earn annual bonuses in any year of that period; both plans allow for certain adjustments to statutory combined ratios and give the joint compensation committees broad discretion to modify bonus amounts, underscoring Donegal’s intent to align executive pay with financial performance and retention goals.

The most recent analyst rating on (DGICA) stock is a Hold with a $20.50 price target. To see the full list of analyst forecasts on Donegal Group stock, see the DGICA Stock Forecast page.