Donegal Group (NASDAQ:DGICB) vs. ProAssurance (NYSE:PRA) Financial Analysis

Donegal Group (NASDAQ:DGICB) and ProAssurance (NYSE:PRA) are both small-cap finance companies, but which is the superior stock? We will compare the two companies based on the strength of their profitability, risk, valuation, dividends, analyst recommendations, earnings and institutional ownership.

Earnings and Valuation

This table compares Donegal Group and ProAssurance”s revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Donegal Group	$968.84 million	0.69	$79.34 million	$1.69	10.73
ProAssurance	$1.10 billion	1.16	$50.92 million	$0.98	25.16

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

Institutional & Insider Ownership

1.2% of Donegal Group shares are held by institutional investors. Comparatively, 85.6% of ProAssurance shares are held by institutional investors. 8.6% of Donegal Group shares are held by company insiders. Comparatively, 1.2% of ProAssurance shares are held by company insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a company will outperform the market over the long term.

Risk and Volatility

Donegal Group has a beta of 0.06, meaning that its stock price is 94% less volatile than the S&P 500. Comparatively, ProAssurance has a beta of 0.04, meaning that its stock price is 96% less volatile than the S&P 500.

Profitability

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

	Net Margins	Return on Equity	Return on Assets
Donegal Group	6.77%	10.41%	2.70%
ProAssurance	4.64%	6.50%	1.52%

Analyst Recommendations

This is a breakdown of current recommendations and price targets for Donegal Group and ProAssurance, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Donegal Group	0	1	0	0	2.00
ProAssurance	0	2	0	1	2.67

ProAssurance has a consensus price target of $25.00, suggesting a potential upside of 1.40%. Given ProAssurance’s stronger consensus rating and higher possible upside, analysts plainly believe ProAssurance is more favorable than Donegal Group.

About Donegal Group

Donegal Group Inc., an insurance holding company, provides personal and commercial lines of property and casualty insurance to businesses and individuals in the Mid-Atlantic, Midwestern, New England, and southern states. It operates through four 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. It also offers homeowners policies, which provide coverage for damage to residences and their contents from a range of perils, including fire, lightning, windstorm, and theft; and liability of the insured arising from injury to other persons or their property. In addition, the company 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 various perils, primarily 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 through a network of approximately 2,400 independent insurance agencies. Donegal Group Inc. was founded in 1986 and is headquartered in Marietta, Pennsylvania.

About ProAssurance

ProAssurance Corporation, through its subsidiaries, provides property and casualty insurance, and reinsurance products in the United States. The company operates through Specialty Property and Casualty, Workers’ Compensation Insurance, and Segregated Portfolio Cell Reinsurance segments. It offers professional liability insurance to healthcare providers and institutions, and attorneys and their firms; medical technology liability insurance to medical technology and life sciences companies; and custom alternative risk solutions, including assumed reinsurance, loss portfolio transfers, and captive cell programs for healthcare professional liability insureds. The company also provides workers’ compensation insurance products, such as guaranteed cost policies, policyholder dividend policies, retrospectively rated policies, and deductible policies, as well as alternative market solutions that include program design, fronting, claims administration, risk management, SPC rental, asset management, and SPC management services for individual companies, agencies, groups, and associations. The company also participates in Syndicate 1729 at Lloyd’s of London for underwriting. It markets its products through independent agencies and brokers, as well as an internal business development team. The company was founded in 1976 and is headquartered in Birmingham, Alabama.