Donegal Group (NASDAQ: DGICA) and XL Group (NYSE:XL) are both financials companies, but which is the superior business? We will compare the two companies based on the strength of their analyst recommendations, profitability, risk, valuation, earnings, institutional ownership and dividends.
Institutional and Insider Ownership
29.3% of Donegal Group shares are owned by institutional investors. Comparatively, 99.0% of XL Group shares are owned by institutional investors. 11.9% of Donegal Group shares are owned by insiders. Comparatively, 3.0% of XL Group shares are owned by insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a stock will outperform the market over the long term.
This table compares Donegal Group and XL Group’s gross revenue, earnings per share (EPS) and valuation.
|Gross Revenue||Price/Sales Ratio||Net Income||Earnings Per Share||Price/Earnings Ratio|
|Donegal Group||$688.42 million||0.71||$30.80 million||$0.55||32.18|
|XL Group||$10.55 billion||0.83||$440.96 million||($1.18)||-29.01|
XL Group has higher revenue and earnings than Donegal Group. XL Group is trading at a lower price-to-earnings ratio than Donegal Group, indicating that it is currently the more affordable of the two stocks.
This is a breakdown of current ratings and price targets for Donegal Group and XL Group, as reported by MarketBeat.com.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
Donegal Group currently has a consensus target price of $19.50, suggesting a potential upside of 10.17%. XL Group has a consensus target price of $44.45, suggesting a potential upside of 29.87%. Given XL Group’s higher possible upside, analysts clearly believe XL Group is more favorable than Donegal Group.
Risk and Volatility
Donegal Group has a beta of 0.3, meaning that its share price is 70% less volatile than the S&P 500. Comparatively, XL Group has a beta of 1, meaning that its share price has a similar volatility profile to the S&P 500.
Donegal Group pays an annual dividend of $0.56 per share and has a dividend yield of 3.2%. XL Group pays an annual dividend of $0.88 per share and has a dividend yield of 2.6%. Donegal Group pays out 101.8% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. XL Group pays out -74.6% of its earnings in the form of a dividend. XL Group has raised its dividend for 5 consecutive years.
This table compares Donegal Group and XL Group’s net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
XL Group beats Donegal Group on 9 of the 17 factors compared between the two stocks.
Donegal Group Company Profile
Donegal Group Inc. (DGI) is an insurance holding company whose insurance subsidiaries offer personal and commercial lines of property and casualty insurance. The Company offered its insurance business to various businesses and individuals in 21 Mid-Atlantic, Midwestern, New England and Southern states, as of December 31, 2016. It has four segments: investment function, personal lines of insurance, commercial lines of insurance and investment in Donegal Financial Services Corporation (DFSC). Its insurance operations include two segments: personal lines of insurance and commercial lines of insurance. The personal lines of insurance, which its insurance subsidiaries write consists of private passenger automobile and homeowners insurance. The commercial lines of insurance, which its insurance subsidiaries write consists of commercial automobile, commercial multi-peril and workers’ compensation insurance. It holds interests in DFSC, which is a unitary savings and loan holding company.
XL Group Company Profile
XL Group plc is an insurance and reinsurance company providing property, casualty and specialty products to industrial, commercial and professional firms, insurance companies and other enterprises. The Company operates through two segments: Insurance and Reinsurance. The Company’s Insurance segment is organized into four product divisions: Global Casualty (Casualty); Global Energy Property, & Construction (EPC); Global Professional (Professional), and Global Specialty (Specialty). Its insurance operations provide insurance policies for corporate risks that may require large limits, use of a captive insurance company and the need for a program of locally issued policies. The Reinsurance segment provides casualty, property risk, property catastrophe, specialty, and other reinsurance lines on a global basis with business being written on both a proportional and non-proportional treaty basis, and also on a facultative basis.
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