Stewart Information Services (NYSE:STC) and Donegal Group (NASDAQ:DGICA) Head-To-Head Survey

Stewart Information Services (NYSE:STC) and Donegal Group (NASDAQ:DGICA) are both finance companies, but which is the superior investment? We will compare the two companies based on the strength of their valuation, dividends, institutional ownership, profitability, earnings, analyst recommendations and risk.

Profitability

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

	Net Margins	Return on Equity	Return on Assets
Stewart Information Services	3.65%	8.57%	4.45%
Donegal Group	8.33%	14.33%	3.41%

Insider and Institutional Ownership

96.9% of Stewart Information Services shares are held by institutional investors. Comparatively, 28.0% of Donegal Group shares are held by institutional investors. 2.8% of Stewart Information Services shares are held by insiders. Comparatively, 3.5% of Donegal Group shares are held by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a stock is poised for long-term growth.

Earnings & Valuation

This table compares Stewart Information Services and Donegal Group”s top-line revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Stewart Information Services	$2.80 billion	0.72	$73.31 million	$3.59	19.93
Donegal Group	$987.83 million	0.72	$50.86 million	$2.42	8.07

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

Analyst Recommendations

This is a summary of recent recommendations for Stewart Information Services and Donegal Group, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Stewart Information Services	0	1	2	0	2.67
Donegal Group	0	1	2	1	3.00

Stewart Information Services presently has a consensus price target of $77.50, indicating a potential upside of 8.30%. Donegal Group has a consensus price target of $18.00, indicating a potential downside of 7.83%. Given Stewart Information Services’ higher probable upside, equities analysts plainly believe Stewart Information Services is more favorable than Donegal Group.

Dividends

Stewart Information Services pays an annual dividend of $2.10 per share and has a dividend yield of 2.9%. Donegal Group pays an annual dividend of $0.73 per share and has a dividend yield of 3.7%. Stewart Information Services pays out 58.5% of its earnings in the form of a dividend. Donegal Group pays out 30.2% 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. Stewart Information Services has raised its dividend for 4 consecutive years and Donegal Group has raised its dividend for 5 consecutive years. Donegal Group is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Volatility and Risk

Stewart Information Services has a beta of 0.95, meaning that its share price is 5% less volatile than the S&P 500. Comparatively, Donegal Group has a beta of 0.01, meaning that its share price is 99% less volatile than the S&P 500.

Summary

Donegal Group beats Stewart Information Services on 9 of the 17 factors compared between the two stocks.

About Stewart Information Services

Stewart Information Services Corporation, through its subsidiaries, provides title insurance and real estate transaction related services in the United States and internationally. The company involves in searching, examining, closing, and insuring the condition of the title to real property. It also offers home and personal insurance services; services for tax-deferred exchanges; and digital customer engagement platform services. It also provides appraisal management, online notarization and closing, credit and real estate information, and search and valuation services. The company serves homebuyers and sellers, residential and commercial real estate professionals, mortgage lenders and servicers, title agencies and real estate attorneys, and home builders through direct operations, network of independent agencies, and other businesses. The company was founded in 1893 and is headquartered in Houston, Texas.

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.