Donegal Group (NASDAQ: DGICA) and W.R. Berkley Corporation (NYSE:WRB) are both finance companies, but which is the better stock? We will contrast the two companies based on the strength of their dividends, institutional ownership, risk, earnings, profitability, valuation and analyst recommendations.
Volatility & Risk
Donegal Group has a beta of 0.31, suggesting that its stock price is 69% less volatile than the S&P 500. Comparatively, W.R. Berkley Corporation has a beta of 0.88, suggesting that its stock price is 12% less volatile than the S&P 500.
Donegal Group pays an annual dividend of $0.56 per share and has a dividend yield of 3.5%. W.R. Berkley Corporation pays an annual dividend of $0.56 per share and has a dividend yield of 0.8%. Donegal Group pays out 114.3% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. W.R. Berkley Corporation pays out 11.8% of its earnings in the form of a dividend. Donegal Group has raised its dividend for 7 consecutive years. Donegal Group is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.
This is a summary of recent ratings and recommmendations for Donegal Group and W.R. Berkley Corporation, as provided by MarketBeat.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
|W.R. Berkley Corporation||0||8||1||0||2.11|
Donegal Group currently has a consensus price target of $18.00, indicating a potential upside of 11.25%. W.R. Berkley Corporation has a consensus price target of $66.00, indicating a potential downside of 2.02%. Given Donegal Group’s higher possible upside, research analysts clearly believe Donegal Group is more favorable than W.R. Berkley Corporation.
Institutional & Insider Ownership
29.5% of Donegal Group shares are owned by institutional investors. Comparatively, 71.2% of W.R. Berkley Corporation shares are owned by institutional investors. 11.9% of Donegal Group shares are owned by company insiders. Comparatively, 22.1% of W.R. Berkley Corporation shares are owned by company insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a company will outperform the market over the long term.
This table compares Donegal Group and W.R. Berkley Corporation’s net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
|W.R. Berkley Corporation||7.86%||7.58%||1.66%|
Valuation and Earnings
This table compares Donegal Group and W.R. Berkley Corporation’s revenue, earnings per share (EPS) and valuation.
|Gross Revenue||Price/Sales Ratio||EBITDA||Earnings Per Share||Price/Earnings Ratio|
|Donegal Group||$715.06 million||0.62||$24.38 million||$0.49||33.02|
|W.R. Berkley Corporation||$7.71 billion||1.06||$1.15 billion||$4.73||14.24|
W.R. Berkley Corporation has higher revenue and earnings than Donegal Group. W.R. Berkley Corporation is trading at a lower price-to-earnings ratio than Donegal Group, indicating that it is currently the more affordable of the two stocks.
W.R. Berkley Corporation beats Donegal Group on 13 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.
W.R. Berkley Corporation Company Profile
W. R. Berkley Corporation is an insurance holding company. It operates through two segments: Insurance and Reinsurance-Global. The Insurance segment consists of its commercial insurance business operations, comprising excess and surplus lines, and admitted lines, throughout the United States, as well as its insurance business operations in the United Kingdom, Continental Europe, South America, Canada, Mexico, Scandinavia, Asia and Australia. Its Insurance segment comprises business units, such as Acadia Insurance, American Mining Insurance Group, Berkley Accident and Health, Berkley Agribusiness Risk Specialists, Berkley Aviation and Berkley Canada. Reinsurance consists of its reinsurance business on a facultative and treaty basis, in the United States, the United Kingdom, Continental Europe, Australia, the Asia-Pacific region and South Africa. Its Reinsurance segment comprises business units, such as Berkley Re America, Berkley Re Asia Pacific, Berkley Re Direct and Berkley Re UK.
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