Donegal Group, Inc. (NASDAQ:DGICA) Increases Dividend to $0.19 Per Share

Key Points

• Dividend raised: Donegal Group announced a quarterly dividend of $0.1925 per share (ex-dividend and record date: May 1), payable May 15, a 5.5% increase versus the prior quarterly payout and an annualized yield of about 4.5%.
• Dividend appears sustainable: the company has raised its dividend each year for the past five years, currently has a payout ratio of 36.5%, and analysts forecast $1.40 EPS next year implying an expected future payout ratio of roughly 52%.
• Valuation and analyst view: DGICA trades around $17.28 with a one-year range of $16.43–$21.12 and a PE of 7.9; the consensus rating is "Moderate Buy" with a $19.00 price target (two Buys, two Holds).

Donegal Group, Inc. (NASDAQ:DGICA - Get Free Report) announced a quarterly dividend on Thursday, April 16th. Investors of record on Friday, May 1st will be given a dividend of 0.1925 per share by the insurance provider on Friday, May 15th. This represents a c) dividend on an annualized basis and a yield of 4.5%. The ex-dividend date is Friday, May 1st. This is a 5.5% increase from Donegal Group's previous quarterly dividend of $0.18.

Donegal Group has raised its dividend by an average of 0.0%annually over the last three years and has raised its dividend every year for the last 5 years. Donegal Group has a payout ratio of 36.5% indicating that its dividend is sufficiently covered by earnings. Research analysts expect Donegal Group to earn $1.40 per share next year, which means the company should continue to be able to cover its $0.73 annual dividend with an expected future payout ratio of 52.1%.

Donegal Group Stock Performance

NASDAQ DGICA traded up $0.08 on Thursday, hitting $17.28. 67,622 shares of the company's stock traded hands, compared to its average volume of 122,107. The company has a current ratio of 0.39, a quick ratio of 0.39 and a debt-to-equity ratio of 0.05. Donegal Group has a 1-year low of $16.43 and a 1-year high of $21.12. The firm's 50-day moving average price is $17.55 and its two-hundred day moving average price is $18.83. The firm has a market capitalization of $639.36 million, a PE ratio of 7.89 and a beta of 0.05.

Donegal Group (NASDAQ:DGICA - Get Free Report) last announced its quarterly earnings data on Thursday, February 19th. The insurance provider reported $0.50 EPS for the quarter, missing the consensus estimate of $0.52 by ($0.02). Donegal Group had a net margin of 8.11% and a return on equity of 12.81%. The business had revenue of $240.14 million for the quarter, compared to analyst estimates of $241.10 million. As a group, analysts expect that Donegal Group will post 1.2 EPS for the current year.

Analyst Upgrades and Downgrades

DGICA has been the subject of several research reports. Zacks Research cut shares of Donegal Group from a "strong-buy" rating to a "hold" rating in a research note on Friday, December 19th. Keefe, Bruyette & Woods decreased their price objective on shares of Donegal Group from $19.50 to $19.00 and set a "market perform" rating for the company in a research note on Tuesday, April 7th. Finally, Weiss Ratings restated a "buy (b)" rating on shares of Donegal Group in a research note on Wednesday, January 21st. Two investment analysts have rated the stock with a Buy rating and two have issued a Hold rating to the company. According to MarketBeat, the company currently has a consensus rating of "Moderate Buy" and a consensus price target of $19.00.

Donegal Group Company Profile

Donegal Group, Inc NASDAQ: DGICA is a property and casualty insurance holding company headquartered in Marietta, Pennsylvania. Through a network of independent agencies, the company offers a suite of personal and commercial insurance products. Its underwriting subsidiaries provide homeowners, automobile, farmowner, commercial multi-peril, surety and umbrella coverages designed to meet the needs of individuals, families and businesses.

The company's origins date back to 1925 with the formation of Donegal Mutual Insurance Company to serve rural communities in Pennsylvania.

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