Analyzing Assurant (NYSE:AIZ) & Donegal Group (NASDAQ:DGICA)

Assurant (NYSE:AIZ) and Donegal Group (NASDAQ:DGICA) are both finance companies, but which is the better business? We will compare the two businesses based on the strength of their institutional ownership, earnings, risk, profitability, analyst recommendations, valuation and dividends.

Dividends

Assurant pays an annual dividend of $3.52 per share and has a dividend yield of 1.2%. Donegal Group pays an annual dividend of $0.77 per share and has a dividend yield of 4.0%. Assurant pays out 16.8% of its earnings in the form of a dividend. Donegal Group pays out 39.9% of its earnings in the form of a dividend. Both companies have healthy payout ratios and should be able to cover their dividend payments with earnings for the next several years. Assurant has raised its dividend for 21 consecutive years and Donegal Group has raised its dividend for 5 consecutive years.

Analyst Ratings

This is a breakdown of recent ratings and recommmendations for Assurant and Donegal Group, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Assurant	0	1	6	1	3.00
Donegal Group	0	2	1	0	2.33

Assurant currently has a consensus price target of $327.14, suggesting a potential upside of 15.77%. Donegal Group has a consensus price target of $20.00, suggesting a potential upside of 3.31%. Given Assurant’s stronger consensus rating and higher possible upside, equities analysts clearly believe Assurant is more favorable than Donegal Group.

Profitability

This table compares Assurant and Donegal Group’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Assurant	7.90%	20.40%	3.34%
Donegal Group	7.38%	10.65%	2.83%

Insider & Institutional Ownership

92.7% of Assurant shares are owned by institutional investors. Comparatively, 28.0% of Donegal Group shares are owned by institutional investors. 0.5% of Assurant shares are owned by insiders. Comparatively, 2.8% of Donegal Group shares are owned by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a stock will outperform the market over the long term.

Earnings and Valuation

This table compares Assurant and Donegal Group”s top-line revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Assurant	$12.81 billion	1.09	$872.70 million	$20.94	13.49
Donegal Group	$978.01 million	1.31	$79.34 million	$1.93	10.03

Assurant has higher revenue and earnings than Donegal Group. Donegal Group is trading at a lower price-to-earnings ratio than Assurant, indicating that it is currently the more affordable of the two stocks.

Risk and Volatility

Assurant has a beta of 0.54, meaning that its share price is 46% less volatile than the S&P 500. Comparatively, Donegal Group has a beta of -0.01, meaning that its share price is 101% less volatile than the S&P 500.

Summary

Assurant beats Donegal Group on 15 of the 18 factors compared between the two stocks.

About Assurant

Assurant, Inc., together with its subsidiaries, provides business services that supports, protects, and connects consumer purchases in North America, Latin America, Europe, and the Asia Pacific. The company operates through two segments: Global Lifestyle and Global Housing. The Global Lifestyle segment offers mobile device solutions, and extended service contracts and related services for consumer electronics and appliances, and credit and other insurance products; and vehicle protection, commercial equipment, and other related services. The Global Housing segment provides lender-placed homeowners, manufactured housing, and flood insurance; renters insurance and related products; and voluntary manufactured housing, and condominium and homeowners insurance products. The company was formerly known as Fortis, Inc. and changed its name to Assurant, Inc. in February 2004. Assurant, Inc. was founded in 1892 and is headquartered in Atlanta, Georgia.

About Donegal Group

Donegal Group Inc., an insurance holding company, provides 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 independent insurance agencies. Donegal Group Inc. was incorporated in 1986 and is based in Marietta, Pennsylvania. Donegal Group Inc. operates as a subsidiary of Donegal Mutual Insurance Company.