Financial Comparison: Donegal Group (NASDAQ:DGICB) vs. Citizens (NYSE:CIA)

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

Valuation and Earnings

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

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Citizens	$255.01 million	0.78	$14.59 million	$0.21	17.00
Donegal Group	$978.01 million	0.93	$79.34 million	$1.78	13.80

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

Profitability

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

	Net Margins	Return on Equity	Return on Assets
Citizens	4.55%	4.73%	0.63%
Donegal Group	7.38%	10.65%	2.83%

Risk and Volatility

Citizens has a beta of 0.43, meaning that its share price is 57% less volatile than the S&P 500. Comparatively, Donegal Group has a beta of 0.04, meaning that its share price is 96% less volatile than the S&P 500.

Analyst Ratings

This is a breakdown of recent ratings and price targets for Citizens and Donegal Group, as reported by MarketBeat.com.

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

Citizens presently has a consensus target price of $5.50, indicating a potential upside of 54.02%. Given Citizens’ stronger consensus rating and higher possible upside, equities analysts clearly believe Citizens is more favorable than Donegal Group.

Institutional & Insider Ownership

13.7% of Citizens shares are owned by institutional investors. Comparatively, 1.2% of Donegal Group shares are owned by institutional investors. 2.2% of Citizens shares are owned by insiders. Comparatively, 8.6% of Donegal Group shares are owned by insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a stock is poised for long-term growth.

Summary

Donegal Group beats Citizens on 8 of the 14 factors compared between the two stocks.

About Citizens

Citizens, Inc. provides life insurance products in the United States and internationally. The company operates in two segments, Life Insurance and Home Service Insurance. The Life Insurance segment issues ordinary whole life insurance and endowment policies in the United States dollar-denominated amounts to non-U.S. residents in through independent marketing agencies and consultants. The Home Service Insurance segment offers final expense life insurance and property insurance policies to middle-and lower-income households, as well as whole life products in Louisiana, Mississippi, and Arkansas. This segment provides its products and services through funeral homes and independent agents. The company provides accident and health insurance policies. Citizens, Inc. was founded in 1969 and is headquartered in Austin, Texas.

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.