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Donegal Group
(NASDAQ:DGICA)
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Rating:68Neutral
Price Target:
$20.50
▲(7.16% Upside)
Action:Reiterated
Date:10/29/26
The score is driven primarily by improved profitability and a strong, conservatively levered balance sheet, alongside attractive valuation (low P/E and ~4% dividend yield). The main constraints are weak/uncertain revenue trajectory and cash-flow volatility, while technical indicators remain broadly neutral and the latest earnings call supports steady underwriting strength but acknowledges premium declines and modest growth expectations.
Positive Factors
Sustained Underwriting Profitability
Nine consecutive profitable underwriting quarters indicate that pricing, risk selection, and claims management are producing durable operating gains. A combined ratio below 100% supports earnings before investment income and provides a stronger foundation for capital generation across insurance cycles.
Negative Factors
Premium Contraction
Declining premium volume limits the scale of Donegal’s underwriting platform and can make fixed expenses less efficient. Continued contraction would constrain revenue growth and reduce the company’s ability to compound earnings, even if underwriting margins remain profitable.
Read all positive and negative factors
Positive Factors
Negative Factors
Sustained Underwriting Profitability
Nine consecutive profitable underwriting quarters indicate that pricing, risk selection, and claims management are producing durable operating gains. A combined ratio below 100% supports earnings before investment income and provides a stronger foundation for capital generation across insurance cycles.
Read all positive factors
Donegal Group (DGICA) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$729.84M
Dividend Yield4.01%
Average Volume (3M)113.29K
Price to Earnings (P/E)10.1
Beta (1Y)0.26
Revenue Growth-3.37%
EPS Growth-22.70%
CountryUS
Employees851
SectorFinancial
Sector Strength70
IndustryInsurance - Property & Casualty
Share Statistics
EPS (TTM)1.97
Shares Outstanding31,542,507
10 Day Avg. Volume102,740
30 Day Avg. Volume113,290
Financial Highlights & Ratios
PEG Ratio0.20
Price to Book (P/B)0.96
Price to Sales (P/S)0.63
P/FCF Ratio8.75
Enterprise Value/Market Cap0.95
Enterprise Value/Revenue0.72
Enterprise Value/Gross Profit2.67
Enterprise Value/Ebitda7.61
Forecast
1Y Price Target
$20.00Price Target Upside4.55% Upside
Rating ConsensusHold
Number of Analyst Covering1
EPS Forecast (FY)1.78
Revenue Forecast (FY)$881.42M
Donegal Group Business Overview & Revenue Model
Company Description
Donegal Group, Inc. is an insurance holding company, which engages in the provision of property and casualty insurance to businesses and individuals. It operates through the following segments: Investment Function, Personal Lines of Insurance, and...
How the Company Makes Money
Donegal Group primarily makes money through (1) insurance underwriting and (2) investment income on its investment portfolio.
1) Underwriting revenue (premiums) and underwriting profit/loss:
- The company earns insurance premiums when it issues p...
Donegal Group Earnings Call Summary
Earnings Call Date:Oct 29, 2026
(Q3-2026)
| % Change Since: |
Next Earnings Date:Feb 25, 2027
Earnings Call Sentiment Positive
The call was broadly positive. Management highlighted a ninth consecutive quarter of underwriting profitability, strong personal lines results, commercial new business growth, higher investment income, technology modernization progress, and improving book value. These positives were tempered by declining premiums, soft-market growth pressure, higher expense and combined ratios, elevated commercial workers' compensation losses, lower commercial retention, and investment losses. The positive operating and financial achievements significantly outweighed the stated challenges.Positive Updates
Ninth Consecutive Quarter of Underwriting Profitability
Donegal reported favorable underwriting results for Q3 2026 and achieved its ninth consecutive quarter of underwriting profitability. After-tax net income was $18.2 million, representing an annualized return on equity of 10.9%.
Negative Updates
Decline in Premiums
Net premiums earned decreased 3% to $222.9 million, while net premiums written decreased 4.5%. Personal lines net premiums written declined 5.6%, and commercial lines net premiums written declined 3.7%.
Read all updates
Q3-2026 Updates
Positive
Negative
Ninth Consecutive Quarter of Underwriting Profitability
Donegal reported favorable underwriting results for Q3 2026 and achieved its ninth consecutive quarter of underwriting profitability. After-tax net income was $18.2 million, representing an annualized return on equity of 10.9%.
Read all positive updates
Company Guidance
Donegal expects deployment of its Guidewire Cloud claims and billing systems in the H1 of 2027, completion of legacy mainframe policy conversions in May of 2027, and completion of its policy administration system migration to the cloud in 2028. The company expects a continuation of exposure decreases throughout the remainder of this year, projects investment rates of 5.25%-5.50% for the Q4 of 2026, anticipates $90 million in projected portfolio cash flow over the next 12 months at a current average yield of 4%, and expects the 135 basis points in yield boost from bonds reinvested during Q3 to increase net investment income by upwards of $1 million annually, with a projected $450,000 annual boost to investment income going forward from a $15.5 million swap. Its 2027 growth plans will be relatively modest in recognition of ongoing market challenges.Donegal Group Financial Statement Overview
Summary
Income Statement
62
Positive
Balance Sheet
78
Positive
Cash Flow
45
Neutral
| Breakdown | TTM | Dec 2025 | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 |
|---|---|---|---|---|---|---|
Income Statement | ||||||
| Total Revenue | 963.18M | 978.01M | 989.61M | 927.34M | 848.22M | 816.47M |
| Gross Profit | 260.77M | 260.90M | 225.18M | 163.95M | 141.71M | 167.02M |
| EBITDA | 91.54M | 102.02M | 67.16M | 10.01M | 1.82M | 37.07M |
| Net Income | 71.09M | 79.34M | 50.86M | 4.43M | -1.96M | 25.25M |
Balance Sheet | ||||||
| Total Assets | 2.48B | 2.39B | 2.34B | 2.27B | 2.24B | 2.26B |
| Cash, Cash Equivalents and Short-Term Investments | 492.61M | 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 | 1.82B | 1.75B | 1.79B | 1.79B | 1.76B | 1.72B |
| Stockholders Equity | 666.11M | 640.42M | 545.78M | 479.75M | 483.59M | 531.04M |
Cash Flow | ||||||
| Free Cash Flow | 58.39M | 70.20M | 67.44M | 28.58M | 67.11M | 76.73M |
| Operating Cash Flow | 58.39M | 70.20M | 67.44M | 28.62M | 67.11M | 76.73M |
| Investing Cash Flow | -74.06M | -91.13M | -48.04M | -16.71M | -98.50M | -62.20M |
| Financing Cash Flow | -18.04M | -5.21M | 9.73M | -13.25M | -1.20M | -59.92M |
Donegal Group Technical Analysis
Positive
19.13
Price Trends
18.71
Positive
18.62
Positive
17.92
Positive
Market Momentum
0.08
Negative
51.78
Neutral
34.85
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 19.13 is above the 20-day moving average (MA) of 18.56, above the 50-day MA of 18.71, and above the 200-day MA of 17.92, indicating a bullish trend. The MACD of 0.08 indicates Negative momentum. The RSI at 51.78 is Neutral, neither overbought nor oversold. The STOCH value of 34.85 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 |
|---|---|---|---|---|---|---|---|
80 Outperform | $1.46B | 10.39 | 14.96% | 1.34% | 11.18% | 52.50% | |
77 Outperform | $1.53B | 22.20 | 7.79% | 3.54% | 7.04% | -18.57% | |
75 Outperform | $291.98M | 8.13 | 0.11% | 1.04% | 34.04% | 15.59% | |
74 Outperform | $5.83B | 11.85 | 14.29% | 1.74% | 4.50% | 28.39% | |
68 Neutral | $729.84M | 10.06 | 10.57% | 4.01% | -3.37% | -22.70% | |
68 Neutral | $18.00B | 11.42 | 9.92% | 3.81% | 9.73% | 1.22% | |
54 Neutral | $305.25M | 39.68 | 3.18% | ― | -13.85% | 354.69% |
* Financial Sector Average
DGICA
Donegal Group
18.72
0.79
4.38%
KINS
Kingstone Companies
20.17
5.45
37.02%
SAFT
Safety Insurance Group
103.90
38.75
59.48%
SIGI
Selective Insurance Group
98.83
26.27
36.20%
UFCS
United Fire Group
56.83
26.84
89.50%
NODK
NI Holdings
14.96
1.70
12.82%
Donegal Group Corporate Events
Business Operations and StrategyDividends
Donegal Group Announces Regular Quarterly Cash Dividend
Positive
Oct 15, 2026
On October 15, 2026, Donegal Group Inc. announced that its board of directors declared a regular quarterly cash dividend of $0.1925 per share for its Class A common stock and $0.175 per share for its Class B common stock. The dividends are schedul...
Business Operations and StrategyFinancial Disclosures
Donegal Group Schedules Third-Quarter 2026 Results Release
Neutral
Oct 6, 2026
Donegal Group Inc., a property and casualty insurance holding company operating in 21 Mid-Atlantic, Midwestern, Southern and Southwestern states, continues to leverage its A.M. Best A (Excellent) rating and NASDAQ listings for its Class A and Clas...
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.