Fundamentals snapshot
DGICA · NMS · Financial Services · Insurance - Property & Casualty
Current price
$19.28
52-week range
$16.11 - $21.06
Market cap
$715.66M
One-glance verdict
We don't put a cash-flow fair value on banks and insurers. For these companies the reported 'cash flow' is really just money moving between loans, deposits and trades — not the leftover profit the owners could actually pocket — so the usual method would print a misleading number.
Balance sheet
Net cash $15.25M. Interest coverage shows how many times profit covers the interest bill.
What stands out
What this company does
Donegal Group is an insurance company that sells protection for personal property like cars and homes, and also for businesses against risks like accidents or property damage. It makes money by collecting regular payments (called premiums) and is profitable as long as the money it pays out for customer damages (claims) is less than the premiums it receives. The company's success therefore depends on accurately predicting how much it will have to pay out for future accidents.
Donegal Group's origins trace back to 1889, when a group of farmers in Pennsylvania created a mutual company to protect their farms and properties. The company grew steadily, and in 1986, it formed Donegal Group Inc. as a holding company (a company that owns other companies' stock) to allow it to raise more capital and expand. This structure allowed it to acquire other smaller insurance companies, which helped it grow from a local Pennsylvania insurer into a regional provider serving multiple states in the Mid-Atlantic, Midwest, South, and Southwest. The company sells its insurance through a network of independent agents rather than directly to customers.
Donegal Group is an insurance company that provides property and casualty insurance for individuals and businesses. Think of it as a company that sells you a promise to help cover the costs if something unexpected happens to your property or if you're responsible for an accident. They sell insurance policies through a network of independent insurance agents, who can help customers choose the right coverage. The company operates in many states across the Mid-Atlantic, Midwest, South, and Southwest regions of the United States.
This is the company's largest business segment, focused on selling insurance products to businesses. This includes coverage for things like work-related injuries (workers' compensation), accidents involving company vehicles (commercial automobile), and a bundle of liability and property damage protections for businesses (commercial multi-peril). Businesses pay premiums (regular payments) to Donegal Group in exchange for this financial protection. Recently, the company has been focusing on growing this part of its business.
This segment provides insurance for individuals and families, which you might be more familiar with. The main products are private passenger automobile insurance, which covers you in case of a car accident, and homeowners insurance, which protects your house and belongings from events like fire or theft. Individuals pay premiums for these policies to protect their personal assets. While still a significant part of the business, Donegal has recently been reducing its focus on this area to improve its overall profitability (the ability to make a profit).
This part of the company doesn't sell insurance directly but is crucial for its financial health. When customers pay their insurance premiums, Donegal Group invests that money, mostly in high-quality, low-risk securities like government and corporate bonds. The goal is to earn additional income from these investments before the money is needed to pay out claims. This investment income is an important source of profit for the company, alongside the premiums it collects.
The company's current strategy is heavily focused on improving its profitability, particularly in its personal insurance lines. This means they are carefully adjusting insurance rates and being more selective about the risks they are willing to cover to ensure they are charging enough to cover potential claims. At the same time, they are looking to grow their commercial lines of business, which have been more profitable recently. They are also investing in technology to make their operations more efficient and to improve the experience for their agents and customers.
Price history
Earnings history
Click any quarter to read the call summary and what the numbers say.
Is it cheap or expensive?
For a bank or insurer, the "free cash flow" shown on its statements is mostly money flowing through loans, deposits and trades — not the leftover profit the owners could actually keep, which is what this kind of valuation needs. Running that through the usual method would spit out a meaningless number, so we leave the cash-flow fair value out here rather than show you something misleading.
Is it drowning in debt?
Net cash $15.3M - more cash than debt. Interest coverage 73.3x.
Donegal Group Inc.'s profit covers its interest bill about 73.3 times over. which is stronger than every peer shown here.
Total debt $35.00M Interest coverage 73.26x This is the baseline the peer rows are being compared against.
Total debt $900.96M Interest coverage 12.95x -82% vs DGICA Carries about 5.7x less debt cushion than DGICA.
Total debt $594.20M Interest coverage 6.53x -91% vs DGICA Carries about 11.2x less debt cushion than DGICA.
Total debt $146.35M Interest coverage 14.13x -81% vs DGICA Carries about 5.2x less debt cushion than DGICA.
Total debt $876.00M Interest coverage 57.23x -22% vs DGICA Carries about 1.3x less debt cushion than DGICA.
What you should know
The numbers
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Valuation
Profitability
Health
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Cash flow
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Debt comparison
What you should know