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Donegal Group Inc. Class B
(NASDAQ:DGICB)
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Rating:75Outperform
Price Target:
$29.00
Action:Reiterated
Date:10/29/26
The score is driven primarily by solid financial quality—especially balance sheet conservatism and improved profitability—alongside an attractive valuation (low P/E with a dividend). Technicals support an uptrend but are tempered by overbought signals. The latest earnings call was constructive on underwriting and investment income momentum, but ongoing premium declines, higher expenses, and commercial-line volatility keep the overall score from being higher.
Positive Factors
Sustained Underwriting Profitability
Nine consecutive quarters of underwriting profitability indicate that Donegal is generating durable earnings from its core insurance operations, not relying solely on investment gains. Continued underwriting discipline can support capital accumulation and improve resilience across changing insurance cycles.
Negative Factors
Premium Contraction
Shrinking premium volume constrains revenue growth and reduces the scale over which fixed operating costs can be spread. If lower rates, retention pressure, and exposure reductions persist, Donegal may have less capacity to compound earnings even when underwriting margins remain profitable.
Read all positive and negative factors
Positive Factors
Negative Factors
Sustained Underwriting Profitability
Nine consecutive quarters of underwriting profitability indicate that Donegal is generating durable earnings from its core insurance operations, not relying solely on investment gains. Continued underwriting discipline can support capital accumulation and improve resilience across changing insurance cycles.
Read all positive factors
Donegal Group Inc. Class B (DGICB) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$726.12M
Dividend Yield2.87%
Average Volume (3M)3.26K
Price to Earnings (P/E)10.1
Beta (1Y)0.18
Revenue Growth-3.37%
EPS Growth-22.70%
CountryUS
Employees851
SectorFinancial
Sector Strength70
IndustryInsurance - Property & Casualty
Share Statistics
EPS (TTM)1.97
Shares Outstanding5,577,000
10 Day Avg. Volume2,712
30 Day Avg. Volume3,259
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 Cap0.94
Enterprise Value/Revenue0.71
Enterprise Value/Gross Profit2.61
Enterprise Value/Ebitda7.43
Forecast
1Y Price TargetN/A
Price Target UpsideN/A
Rating ConsensusN/A
Number of Analyst Covering0
EPS Forecast (FY)N/A
Revenue Forecast (FY)N/A
Donegal Group Inc. Class B Business Overview & Revenue Model
Company Description
Donegal Group Inc., an insurance holding company, provides commercial and personal lines of property and casualty coverages. It operates through three segments: Investment Function, Commercial Lines of Insurance, and Personal Lines of Insurance. T...
How the Company Makes Money
Donegal Group’s earnings are driven mainly by its property and casualty insurance operations and the investment income generated from holding insurance float. On the insurance side, the company writes policies (commercial and personal lines) and e...
Donegal Group Inc. Class B Earnings Call Summary
Earnings Call Date:Oct 29, 2026
(Q3-2026)
| Next Earnings Date:Feb 25, 2027
Earnings Call Sentiment Positive
The call was positive overall. Donegal reported $18.2 million of after-tax net income, a 10.9% annualized return on equity, its ninth consecutive quarter of underwriting profitability, strong personal lines results, improving investment income, and continued progress on cloud and AI initiatives. These strengths were partially offset by declining premiums, soft-market growth challenges, higher expense and combined ratios, weaker commercial retention, and elevated workers' compensation losses.Positive Updates
Ninth Consecutive Quarter of Underwriting Profitability
Donegal achieved its ninth consecutive quarter of underwriting profitability. Solid underwriting income and higher investment income contributed $18.2 million of after-tax net income in Q3 2026, equivalent to an annualized return on equity of 10.9%.
Negative Updates
Decline in Net Premiums
Net premiums earned decreased 3% to $222.9 million in Q3 2026, while net premiums written decreased 4.5%. Lower premium rate increases and retention levels were only partially offset by higher new business volume.
Read all updates
Q3-2026 Updates
Positive
Negative
Ninth Consecutive Quarter of Underwriting Profitability
Donegal achieved its ninth consecutive quarter of underwriting profitability. Solid underwriting income and higher investment income contributed $18.2 million of after-tax net income in Q3 2026, equivalent to an annualized return on equity of 10.9%.
Read all positive updates
Company Guidance
Management said the new Guidewire Cloud claims and billing systems have planned deployment on track for the H1 of 2027, the remaining legacy mainframe policies remain on track for completion in May of 2027, and the on-premises policy administration system is expected to complete its cloud migration in 2028; it 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 a 135 basis points in yield boost to increase net investment income by upwards of $1 million annually, while the $15.5 million swap is projected to provide a $450,000 annual boost to investment income going forward; for 2027, growth plans will be relatively modest in recognition of ongoing market challenges, with enhancing top-line growth achievement through new business success and rate and renewal retention a top priority.Donegal Group Inc. Class B Financial Statement Overview
Summary
Income Statement
67
Positive
Balance Sheet
86
Very Positive
Cash Flow
60
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 Inc. Class B Technical Analysis
Positive
―
Price Trends
21.29
Positive
21.83
Positive
19.50
Positive
Market Momentum
1.30
Negative
60.20
Neutral
88.57
Negative
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For DGICB, the sentiment is Positive. The current price of undefined is equal to the 20-day moving average (MA) of 20.27, equal to the 50-day MA of 21.29, and equal to the 200-day MA of 19.50, indicating a bullish trend. The MACD of 1.30 indicates Negative momentum. The RSI at 60.20 is Neutral, neither overbought nor oversold. The STOCH value of 88.57 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for DGICB.
Donegal Group Inc. Class B Peers Comparison
UnderperformOutperform
Sector (68)
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
68 Neutral | $18.00B | 11.42 | 9.92% | 3.81% | 9.73% | 1.22% |
* Financial Sector Average
Performance Comparison
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.