Fundamental analysis: Donegal Group Inc. (DGICA)

Awarener score: 7.2

Conclusion

The higher the Awarener score, the more bang you get for the buck. It measures how much genuine funds the company generates for the stock price paid (could not be estimated), the business stability (Superb) and growth (Poor), and the company's inclination to return cash to the stockholders (Superb).

Note: All scores range from 1 (worst) to 10 (best). Conclusions are updated daily with closing stock prices and new reported quarterly financial statements.

Revenue score: 6.5

Business has been shrinking. It's been below average when measured against peer companies.
Donegal Group Inc. business trend is extremely stable, which is best. It looks better than most rivals.

Margins score: 4.3

DGICA profit margins -on goods and services sold- are usually destitute. They stand bottom tier against rival companies.
Business profit on sales tends to be hardly sufficient. It's weak when measured against competitors.
Profits on sales made -available to repay debt and purchase properties- are usually meagre. They remain lacking compared to peers.
Earnings -before income taxes and interests on loans taken- tend to be hardly sufficient in relation to total revenues. They're still somewhat worse than similar companies.
Profits -before income taxes- are usually hardly sufficient considering total sales, and remain below average when measured against rivals.
Total net profit tends to be sufficient when confronted to sales. Company stands below average when measured against comparable firms.

Growth score: 1.0

Donegal Group Inc. has an unknown gross margin growth, as there is not enough data to analyze. It's been impossible to compare to competitors.
There is not sufficient data to estimate the operating income margin trend, which has been therefore unknown against comparable firms.
In past years, the company couldn't always turn a profit -available to repay debt and purchase properties-, which compares last-in-rank when measured against peer enterprises.
In the previous years, the firm couldn't always make a profit -before income taxes and interests on loans taken-. It turns to be a disappointment compared to similar stocks.
In past years, at least once the company lost money -before income taxes-. It was bottom tier against rivals.
In the previous years, the firm had at least a total net loss, and last-in-rank when measured against peer companies.
The company lost money at least once in the past years. It's been a disappointment compared to industry peers.

Miscellaneous score: 8.0

DGICA managed to pay little to no income taxes on profits made in the past years. It's been top-notch against peers.
The company does not report R&D expenses. It's meaningless to measure in relation to competitors.
We have insufficient data to estimate how effective is research and development effort. It stands unknown against rival companies.

Profitability score: 5.0

Donegal Group Inc. usually gets hardly sufficient returns on the resources it controls. It proves below average when measured against peer firms.
The company normally gets hardly sufficient proceeds -on the resources directly invested in the business-. They remain lacking compared to similar companies.
Profitability -in relation to owned resources- is usually modest. It ranks almost average when measured against competitors.
In the past, got barely sufficient returns -on the tangible resources it controls-. This metric is usually related to the industry in which operates and combines profitability versus reinvestment needs. It's below average when measured against comparable enterprises.

Usage of Funds score: 7.3

DGICA usually uses a sparse portion of genuine funds generated to buy or replace property, plant, or equipment. The need for reinvestments is modest. It stands below average when measured against rival firms.
The company is usually not replacing property, plant, and equipment that gets old, instead using funds in something else. It can't keep forever, which is substantially worse when measured against industry peers.
In the past twelve months it paid excellent dividends, considering the current stock price. It came well ranked against competitors.
Has significantly increased dividend payments in the past years. Business prospects probably have improved. The company has behaved in good shape compared to similar firms.
Dividend payments usually represent a minor portion of genuine funds generation and are most likely safe. Sustainability looks somewhat worse than comparable companies.
The company usually significantly reduces the pool of investors, resulting in fewer mouths feeding on the pie of profits. It remains impressive in relation to peer enterprises.
We are not sure on the effectiveness of the company when repurchasing shares, as there were not enough numbers to crunch. It stands unidentified against rivals.
We do not have sufficient data to comment on buybacks and their sustainability. It still looks dubious against competitors.

Balance Sheet score: 8.8

Donegal Group Inc. intangible assets (like brands and goodwill) represent a non-significant portion of resources controlled, according to accounting books, which is safer. It happens to be similar to peer companies.
The company has plenty short-term resources to face short-term obligations. There're no liquidity concerns. It turns to be a slight improvement compared to similar firms.
Almost no resources controlled were provided for with financial debt. Financial strength is great. Company could significantly increase debt if it wished so, to reinvest in business, to buy a smaller company or to reward stockholders. It remains well ranked against rival firms.
Controlled resources can be made into cash within reason, which is quite good for liquidity. It looks more than average in relation to rivals.
For every dollar of short-term obligations, the company has plenty of dollars in cash and short-term receivables. It's a slight improvement compared to peer firms.
For every dollar of short-term obligations, the company has plenty of dollars in cash and equivalents, which is somewhat better than similar enterprises.
Usually, sales are mostly on cash. It still ranks great when measured against peers.
Days of inventory outstanding are not known. It comes up as a big question mark against competitors.
We could not gauge the normal operating cycle of the company. It happens to be a mystery against peers.
Unfortunately, we had not enough data to estimate the days of payables outstanding. It ranks unknown against industry peers.
Cash conversion cycle remains unknown, due to not having enough inputs. It's incomparable against similar companies.
Net interest expenses consume a non-significant portion of usual business earnings, and are therefore extremely easily to bear. It stands better than most rival firms.
Business earnings have usually been very good when measured against loans taken. Cutting back reinvesting in the business, it could take less than two years to repay the obligations with current profitability. It ranks encouraging in relation to comparable enterprises.
Revenues are huge in relation to property, plant, and equipment required to operate. This metric is likely dependent on the industry the company operates in. Low property, plant, and equipment requirements, allows the company to keep more money to reward stockholders in the long run. It looks impressive in relation to similar firms.
Resource exploitation is slightly low when yearly sales are considered, business volume should be increased. This metric is normally tied to the industry where the firm belongs. It's still slightly better than peer companies.

Valuation score: 6.0

Donegal Group Inc. reported losses, so valuating it in relation to earnings is meaningless. It happens to be last-in-rank when measured against competitors.
Price-to-Tangible-Book-Value is a fairly complex metric. Run again in analytical mode if you're interested in a technical explanation. It remains in good shape compared to peers.
There is insufficient information on the genuine funds generation capability showed in the past twelve months, which stands as an incognita in relation to similar companies.
Unfortunately, lack of enough yearly data impaired our ability to estimate the normal earnings power. It's still an unknown variable to measure against industry firms.
In the past twelve months, the company has significantly rewarded investors, considering both dividends and share on the pie of earnings. It came up impressive in relation to peer ventures.
We are unsure on the relationship between net financial position and market capitalization of the stock. It looks we will not be able to reach a conclusion regarding similar enterprises.
Considering the past twelve months, traditional Price-to-Earnings relation has been negative, as the company lost money. It ranks last-in-rank when measured against peer companies.
Comparing the current stock price with the past twelve-months revenues gives a not far from one-to-one relationship. This is an important metric to check its evolution through time, and to compare to industry peers. It looks a slight improvement compared to rival firms.
The relation between the stock price and accounting book value might be more than reasonable. It's important both to check this metric through time and to compare it with rival companies. The company remains somewhat better than peer firms.
We could not gauge an alternative metric of earnings power of the past twelve months. It happens to be an interesting metric to relate to industry peers.
An alternate metric on the usual genuine-funds generation ability could not be provided. It's still unknown against peer companies.

Total score: 5.9

Company at a glance: Donegal Group Inc. (DGICA)

Sector, industry: Financial Services, Insurance—Property & Casualty

Market Cap: 0.50 billions

Revenues TTM: 0.85 billions

Donegal Group Inc., an insurance holding company, provides personal and commercial lines of property and casualty insurance to businesses and individuals. It operates through three segments: Investment Function, Personal Lines of Insurance, and Commercial Lines of Insurance. The company offers private passenger automobile policies that provide protection against liability for bodily injury and property damage arising from automobile accidents, as well as protection against loss from damage to automobiles; and homeowners policies, which provide coverage for damage to residences and their contents from a range of perils, including fire, lightning, windstorm, and theft, as well as liability of the insured arising from injury to other persons or their property. It also offers commercial automobile policies that provide protection against liability for bodily injury and property damage arising from automobile accidents and protection against loss from damage to automobiles owned by the insured; commercial multi-peril policies that provide protection to businesses against combining liability and physical damage coverages; and workers' compensation policies, which provide benefits to employees for injuries sustained during employment. The company markets its insurance products primarily to Mid-Atlantic, Midwestern, New England, Southern, and Southwestern regions through approximately 2,300 independent insurance agencies. Donegal Group Inc. was incorporated in 1986 and is headquartered in Marietta, Pennsylvania.