Donegal Group (NASDAQ:DGICB) and Universal Insurance (NYSE:UVE) Head to Head Comparison

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

Profitability

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

	Net Margins	Return on Equity	Return on Assets
Universal Insurance	13.94%	38.15%	7.63%
Donegal Group	7.24%	10.49%	2.80%

Institutional and Insider Ownership

66.6% of Universal Insurance shares are held by institutional investors. Comparatively, 1.2% of Donegal Group shares are held by institutional investors. 15.0% of Universal Insurance shares are held by company insiders. Comparatively, 8.6% of Donegal Group shares are held by company insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a company is poised for long-term growth.

Dividends

Universal Insurance pays an annual dividend of $0.64 per share and has a dividend yield of 1.4%. Donegal Group pays an annual dividend of $0.70 per share and has a dividend yield of 2.7%. Universal Insurance pays out 8.0% of its earnings in the form of a dividend. Donegal Group pays out 40.7% 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

Universal Insurance has a beta of 0.63, suggesting that its share price is 37% less volatile than the S&P 500. Comparatively, Donegal Group has a beta of -0.1, suggesting that its share price is 110% less volatile than the S&P 500.

Analyst Ratings

This is a summary of recent ratings and recommmendations for Universal Insurance and Donegal Group, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Universal Insurance	0	1	0	2	3.33
Donegal Group	0	1	0	0	2.00

Universal Insurance presently has a consensus price target of $51.00, indicating a potential upside of 9.66%. Given Universal Insurance’s stronger consensus rating and higher probable upside, equities analysts plainly believe Universal Insurance is more favorable than Donegal Group.

Earnings and Valuation

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

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Universal Insurance	$1.60 billion	0.80	$182.95 million	$8.00	5.81
Donegal Group	$978.01 million	0.98	$79.34 million	$1.72	14.97

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

Summary

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

About Universal Insurance

Universal Insurance Holdings, Inc., together with its subsidiaries, operates as an integrated insurance holding company in the United States. It develops, markets, and underwrites insurance products for personal residential insurance, such as homeowners, renters/tenants, condo unit owners, and dwelling/fire; and offers allied lines, coverage for other structures, and personal property, liability, and personal articles coverages. The company also advises on actuarial issues, oversees distribution, administers claims payments, performs policy administration and underwriting, and assists with reinsurance negotiations; places and manages reinsurance programs for the insurance entities; and operates Clovered.com, a digital agency for various carrier partners and utilization of digital applications for adjusting claims. It offers its products through a network of independent agents, as well as direct-to-consumer online solutions, including digital insurance agency. The company was formerly known as Universal Heights, Inc. and changed its name to Universal Insurance Holdings, Inc. in January 2001. Universal Insurance Holdings, Inc. was incorporated in 1990 and is headquartered in Fort Lauderdale, 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.