Donegal Group provides property and casualty insurance to businesses and individuals in the Mid-Atlantic, Midwestern, New England, and southern states. It operates through Investment Function, Personal Lines of Insurance, Commercial Lines of Insurance, and Investment in DFSC segments. The company was founded in 1986 and is based in Marietta, Pennsylvania.
DGICA Price Forecast Based on DCF Valuation
DCF Fair Value Target:
We started the process of determining a valid price forecast for Donegal Group Inc with a discounted cash flow analysis -- the results of which can be found in the table below. To summarize, we found that Donegal Group Inc ranked in the 75th percentile in terms of potential gain offered. More precisely, our analysis suggests the stock is undervalued by approximately 312% on a DCF basis. In terms of the factors that were most noteworthy in this DCF analysis for DGICA, they are:
The company's debt burden, as measured by earnings divided by interest payments, is 56.51; that's higher than 93.09% of US stocks in the Financial Services sector that have positive free cash flow.
Donegal Group Inc's weighted average cost of capital (WACC) is 8%; for context, that number is higher than merely 20.37% of tickers in our DCF set.
DGICA's estimated cost of debt, based largely on its market capitalization and its interest coverage ratio, is 2%; for context, that number is higher than merely 20.37% of tickers in our DCF set.
Terminal Growth Rate in Free Cash Flow
Return Relative to Current Share Price
For other companies in the Financial Services that have a similar discounted cashflow valuation profile (and ensuing price forecasts) as DGICA, try OXSQ, HCI, RE, FAF, and ACGL.
The significant $1.5 million insider purchase recorded on the 14th of August this year in Donegal Group (DGICA) made us take notice of this stock. Furthermore, this purchase was then followed up by a further smaller purchase by Director Jack lee late last week. The long-term chart explains the insiders'...
Individual Trader on Seeking Alpha | August 24, 2020
Donegal Group, Inc. (DGICA) Q2 2020 Results Earnings Conference Call July 28, 2020, 11:00 AM ET Company Participants Kevin Burke - President and Chief Executive Officer Jeffrey Miller - Chief Financial Officer Conference Call Participants Sean Reitenbach - KBW Bob Farnam - Boenning and Scattergood Jamie Inglis - Philo Smith...