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

Valuation & Earnings

This table compares The Navigators Group and Donegal Group’s revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
The Navigators Group $1.24 billion 1.31 $135.66 million $2.83 19.40
Donegal Group $715.06 million 0.58 $24.38 million $0.49 30.82

The Navigators Group has higher revenue and earnings than Donegal Group. The Navigators 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.

Institutional and Insider Ownership

73.9% of The Navigators Group shares are owned by institutional investors. Comparatively, 29.5% of Donegal Group shares are owned by institutional investors. 24.1% of The Navigators Group shares are owned by insiders. Comparatively, 11.9% of Donegal Group shares are owned by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a stock will outperform the market over the long term.

Volatility and Risk

The Navigators Group has a beta of 0.77, meaning that its stock price is 23% less volatile than the S&P 500. Comparatively, Donegal Group has a beta of 0.31, meaning that its stock price is 69% less volatile than the S&P 500.

Dividends

The Navigators Group pays an annual dividend of $0.24 per share and has a dividend yield of 0.4%. Donegal Group pays an annual dividend of $0.56 per share and has a dividend yield of 3.7%. The Navigators Group pays out 8.5% of its earnings in the form of a dividend. Donegal Group pays out 114.3% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future.

Analyst Ratings

This is a summary of current ratings for The Navigators Group and Donegal Group, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
The Navigators Group 0 5 0 0 2.00
Donegal Group 0 2 0 0 2.00

The Navigators Group presently has a consensus price target of $56.75, indicating a potential upside of 3.37%. Donegal Group has a consensus price target of $18.00, indicating a potential upside of 19.21%. Given Donegal Group’s higher probable upside, analysts plainly believe Donegal Group is more favorable than The Navigators Group.

Profitability

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

Net Margins Return on Equity Return on Assets
The Navigators Group 6.86% 6.53% 1.60%
Donegal Group 1.84% 2.24% 0.60%

Summary

The Navigators Group beats Donegal Group on 11 of the 14 factors compared between the two stocks.

The Navigators Group Company Profile

The Navigators Group, Inc. is an insurance holding company. The Company is an international insurance company focused on marine insurance. The Company’s segments include U.S. Insurance, International Insurance (Int’l Insurance), Global Reinsurance (GlobalRe) and Corporate. The Company’s Property and Casualty (P&C) insurance business primarily offers general liability coverage, and umbrella and excess liability coverage to commercial enterprises through its U.S. Insurance and Int’l Insurance segments. It also offers reinsurance products through its GlobalRe segment. It distributes its products through international, national and regional, retail and wholesale insurance brokers. The Company’s U.S. Insurance and Int’l Insurance segments consists of three segments, such as Marine, Property and Casualty (P&C) and Professional Liability. Its GlobalRe products include accident & health (A&H), marine, P&C and professional liability.

Donegal Group Company Profile

Donegal Group Inc. (DGI) is an insurance holding company whose insurance subsidiaries offer personal and commercial lines of property and casualty insurance. The Company offered its insurance business to various businesses and individuals in 21 Mid-Atlantic, Midwestern, New England and Southern states, as of December 31, 2016. It has four segments: investment function, personal lines of insurance, commercial lines of insurance and investment in Donegal Financial Services Corporation (DFSC). Its insurance operations include two segments: personal lines of insurance and commercial lines of insurance. The personal lines of insurance, which its insurance subsidiaries write consists of private passenger automobile and homeowners insurance. The commercial lines of insurance, which its insurance subsidiaries write consists of commercial automobile, commercial multi-peril and workers’ compensation insurance. It holds interests in DFSC, which is a unitary savings and loan holding company.

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