Donegal Group (NASDAQ:DGICB) & HCI Group (NYSE:HCI) Financial Comparison

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

Earnings and Valuation

This table compares HCI Group 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
HCI Group	$900.95 million	2.58	$299.01 million	$22.78	8.00
Donegal Group	$978.01 million	0.86	$79.34 million	$1.69	13.46

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

Dividends

HCI Group pays an annual dividend of $1.60 per share and has a dividend yield of 0.9%. Donegal Group pays an annual dividend of $0.70 per share and has a dividend yield of 3.1%. HCI Group pays out 7.0% of its earnings in the form of a dividend. Donegal Group pays out 41.4% 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. Donegal Group has increased 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 & Risk

HCI Group has a beta of 1.03, meaning that its share price is 3% more 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.

Institutional and Insider Ownership

87.0% of HCI Group shares are owned by institutional investors. Comparatively, 1.2% of Donegal Group shares are owned by institutional investors. 18.5% of HCI Group shares are owned by insiders. Comparatively, 8.6% of Donegal Group shares are owned by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a company is poised for long-term growth.

Profitability

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

	Net Margins	Return on Equity	Return on Assets
HCI Group	32.64%	30.88%	12.31%
Donegal Group	6.77%	10.31%	2.69%

Analyst Recommendations

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

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
HCI Group	0	2	4	0	2.67
Donegal Group	0	1	0	0	2.00

HCI Group currently has a consensus price target of $245.00, suggesting a potential upside of 34.39%. Given HCI Group’s stronger consensus rating and higher possible upside, research analysts clearly believe HCI Group is more favorable than Donegal Group.

Summary

HCI Group beats Donegal Group on 13 of the 17 factors compared between the two stocks.

About HCI Group

HCI Group, Inc., together with its subsidiaries, engages in the property and casualty insurance, insurance management, reinsurance, real estate, and information technology businesses in Florida. It provides residential insurance products, such as homeowners, fire, flood, and wind-only insurance to homeowners, condominium owners, and tenants for properties, as well as offers reinsurance programs. The company also owns and operates waterfront properties and retail shopping centers, and an office building, as well as commercial properties for investment purposes. In addition, it designs and develops web-based applications and products for mobile devices, including SAMS, an online policy administration platform; Harmony, a policy administration platform; ClaimColony, an end-to-end claims management platform; and AtlasViewer, a mapping and data visualization platform. The company was formerly known as Homeowners Choice, Inc. and changed its name to HCI Group, Inc. in May 2013. HCI Group, Inc. was incorporated in 2006 and is headquartered in Tampa, Florida.

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.