Goosehead Insurance (NASDAQ:GSHD – Get Free Report) and Donegal Group (NASDAQ:DGICA – Get Free Report) are both small-cap finance companies, but which is the superior stock? We will contrast the two companies based on the strength of their analyst recommendations, profitability, valuation, risk, earnings, institutional ownership and dividends.
Dividends
Goosehead Insurance pays an annual dividend of $4.60 per share and has a dividend yield of 10.6%. Donegal Group pays an annual dividend of $0.77 per share and has a dividend yield of 4.2%. Goosehead Insurance pays out 335.8% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Donegal Group pays out 39.9% of its earnings in the form of a dividend. Donegal Group has raised its dividend for 5 consecutive years.
Insider & Institutional Ownership
28.0% of Donegal Group shares are owned by institutional investors. 38.1% of Goosehead Insurance shares are owned by insiders. Comparatively, 2.8% of Donegal Group shares are owned by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a stock will outperform the market over the long term.
Valuation and Earnings
| Gross Revenue | Price/Sales Ratio | Net Income | Earnings Per Share | Price/Earnings Ratio | |
| Goosehead Insurance | $402.16 million | 3.83 | $27.83 million | $1.37 | 31.67 |
| Donegal Group | $963.18 million | 1.25 | $79.34 million | $1.93 | 9.42 |
Donegal Group has higher revenue and earnings than Goosehead Insurance. Donegal Group is trading at a lower price-to-earnings ratio than Goosehead Insurance, indicating that it is currently the more affordable of the two stocks.
Analyst Ratings
This is a breakdown of recent ratings and price targets for Goosehead Insurance and Donegal Group, as reported by MarketBeat.com.
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score | |
| Goosehead Insurance | 1 | 7 | 6 | 1 | 2.47 |
| Donegal Group | 1 | 1 | 1 | 0 | 2.00 |
Goosehead Insurance presently has a consensus price target of $66.27, indicating a potential upside of 52.74%. Donegal Group has a consensus price target of $20.00, indicating a potential upside of 9.95%. Given Goosehead Insurance’s stronger consensus rating and higher probable upside, equities analysts plainly believe Goosehead Insurance is more favorable than Donegal Group.
Profitability
This table compares Goosehead Insurance and Donegal Group’s net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets | |
| Goosehead Insurance | 8.78% | -21.00% | 9.43% |
| Donegal Group | 7.38% | 10.65% | 2.83% |
Risk & Volatility
Goosehead Insurance has a beta of 1.46, meaning that its share price is 46% more volatile than the S&P 500. Comparatively, Donegal Group has a beta of -0.03, meaning that its share price is 103% less volatile than the S&P 500.
Summary
Goosehead Insurance beats Donegal Group on 11 of the 18 factors compared between the two stocks.
About Goosehead Insurance
Goosehead Insurance, Inc. operates as a holding company for Goosehead Financial, LLC that engages in the provision of personal lines insurance agency services in the United States. The company offers homeowner’s, automotive, dwelling property, flood, wind, earthquake, excess liability or umbrella, motorcycle, recreational vehicle, general liability, property, and life insurance products and services. As of December 31, 2023, it operated 1,415 franchise locations. The company was founded in 2003 and is headquartered in Westlake, 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.
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