DGICA Price Forecast Based on Dividend Discount Model

A technique commonly used by dividend investors to value dividend-issuing stocks is the Dividend Discount Model (DDM), which seeks to determine a fair share price based on the dividend provided by the company relative to a number of other company-specific factors. Regarding Donegal Group Inc, the DDM model, as implemented by StockNews, implies a positive return of 46.11% relative to its current price. Some interesting points we thought investors may wish to consider regarding the dividend discount model forecast for Donegal Group Inc are:

• In comparison to other US listed dividend yielding stocks in the Financial Services sector, the expected return of 46.11%, based on the stock's current share price and target price based on a dividend discount model, is greater than 84.81% of the DDM-forecasted return of its its sector peers.
• Compared to all dividend issuing stocks in our set, DGICA has a discount rate lower than 84.81% of them (a lower discount rate is associated with lower risk).
• A stock's beta generally indicates its volatility relative to the broader equity market; as for DGICA, approximately 82.53% of US-listed dividend issuers had a higher beta, and thus may have greater price volatility.
• In comparison to its fellow dividend issuing stocks in the Financial Services sector, DGICA's equity discount rate is less than 86.79% of those stocks.

DGICA Dividends vs. Peers