Donegal Group (NASDAQ:DGICA) Reaches New 12-Month Low After Earnings Miss

Key Points

• Donegal Group reported quarterly EPS of $0.32 versus $0.40 expected and revenue of $236.0M versus $247.8M, sending the stock to a new 52-week low of $16.29 intraday.
• The company raised its quarterly dividend to $0.1925 (annualized $0.77), implying a 4.6% yield with a payout ratio of about 33% and an ex-dividend date of May 1.
• Analysts hold a consensus "Moderate Buy" with an average price target of $19, insiders showed mixed activity (Mutual Insurance Co Donegal bought 9,000 shares while an EVP sold 9,000), and the stock trades at a relatively low valuation (market cap ≈ $615M, P/E ≈ 7.6).

Donegal Group, Inc. (NASDAQ:DGICA - Get Free Report) shares reached a new 52-week low during mid-day trading on Friday after the company announced weaker than expected quarterly earnings. The company traded as low as $16.29 and last traded at $16.6570, with a volume of 23463 shares changing hands. The stock had previously closed at $16.82.

The insurance provider reported $0.32 earnings per share (EPS) for the quarter, missing the consensus estimate of $0.40 by ($0.08). The company had revenue of $236.00 million for the quarter, compared to analyst estimates of $247.83 million. Donegal Group had a return on equity of 12.81% and a net margin of 8.11%.

Donegal Group Increases Dividend

The business also recently declared a quarterly dividend, which will be paid on Friday, May 15th. Investors of record on Friday, May 1st will be given a dividend of $0.1925 per share. This is a positive change from Donegal Group's previous quarterly dividend of $0.18. The ex-dividend date is Friday, May 1st. This represents a $0.77 annualized dividend and a yield of 4.6%. Donegal Group's dividend payout ratio is currently 33.33%.

Analysts Set New Price Targets

Several brokerages recently issued reports on DGICA. Weiss Ratings reiterated a "buy (b)" rating on shares of Donegal Group in a research report on Wednesday, January 21st. Keefe, Bruyette & Woods reduced their price target on shares of Donegal Group from $19.50 to $19.00 and set a "market perform" rating on the stock in a research report on Tuesday, April 7th. Two equities research analysts have rated the stock with a Buy rating and two have issued a Hold rating to the stock. According to MarketBeat.com, the stock has an average rating of "Moderate Buy" and an average price target of $19.00.

Insider Buying and Selling

In other Donegal Group news, major shareholder Mutual Insurance Co Donegal bought 9,000 shares of the stock in a transaction that occurred on Tuesday, March 3rd. The stock was acquired at an average cost of $17.63 per share, with a total value of $158,670.00. Following the purchase, the insider owned 13,937,704 shares in the company, valued at $245,721,721.52. This trade represents a 0.06% increase in their ownership of the stock. The transaction was disclosed in a document filed with the Securities & Exchange Commission, which can be accessed through this link. Also, EVP William Daniel Delamater sold 9,000 shares of the stock in a transaction that occurred on Tuesday, March 3rd. The stock was sold at an average price of $17.63, for a total value of $158,670.00. Following the sale, the executive vice president directly owned 2,012 shares of the company's stock, valued at approximately $35,471.56. The trade was a 81.73% decrease in their ownership of the stock. The SEC filing for this sale provides additional information. 2.75% of the stock is currently owned by corporate insiders.

Institutional Trading of Donegal Group

Large investors have recently bought and sold shares of the business. State of Alaska Department of Revenue bought a new stake in Donegal Group during the 3rd quarter worth approximately $26,000. Smartleaf Asset Management LLC grew its stake in shares of Donegal Group by 576.6% during the 4th quarter. Smartleaf Asset Management LLC now owns 2,747 shares of the insurance provider's stock worth $55,000 after acquiring an additional 2,341 shares in the last quarter. Versant Capital Management Inc grew its stake in shares of Donegal Group by 79.1% during the 3rd quarter. Versant Capital Management Inc now owns 3,009 shares of the insurance provider's stock worth $58,000 after acquiring an additional 1,329 shares in the last quarter. EverSource Wealth Advisors LLC grew its stake in shares of Donegal Group by 422.6% during the 2nd quarter. EverSource Wealth Advisors LLC now owns 3,679 shares of the insurance provider's stock worth $74,000 after acquiring an additional 2,975 shares in the last quarter. Finally, CANADA LIFE ASSURANCE Co grew its stake in shares of Donegal Group by 31.6% during the 4th quarter. CANADA LIFE ASSURANCE Co now owns 3,733 shares of the insurance provider's stock worth $75,000 after acquiring an additional 896 shares in the last quarter. 27.96% of the stock is owned by institutional investors.

Donegal Group Stock Down 1.1%

The company has a market capitalization of $615.31 million, a P/E ratio of 7.60 and a beta of 0.05. The firm's 50 day moving average price is $17.31 and its two-hundred day moving average price is $18.70. 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 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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