Intact Financial (OTCMKTS:IFCZF – Get Rating) and Donegal Group (NASDAQ:DGICA – Get Rating) are both financial services companies, but which is the superior business? We will compare the two companies based on the strength of their earnings, valuation, dividends, profitability, institutional ownership, risk and analyst recommendations.
Dividends
Intact Financial pays an annual dividend of $1.88 per share and has a dividend yield of 1.3%. Donegal Group pays an annual dividend of $0.68 per share and has a dividend yield of 4.5%. Intact Financial pays out 36.2% of its earnings in the form of a dividend. Donegal Group pays out -212.5% 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 raised its dividend for 10 consecutive years. Donegal Group is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.
Analyst Recommendations
This is a summary of recent ratings and recommmendations for Intact Financial and Donegal Group, as provided by MarketBeat.com.
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score | |
| Intact Financial | 0 | 2 | 1 | 0 | 2.33 |
| Donegal Group | 0 | 0 | 0 | 0 | N/A |
Profitability
This table compares Intact Financial and Donegal Group’s net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets | |
| Intact Financial | N/A | N/A | N/A |
| Donegal Group | -1.14% | -0.34% | -0.07% |
Valuation & Earnings
This table compares Intact Financial and Donegal Group’s revenue, earnings per share (EPS) and valuation.
| Gross Revenue | Price/Sales Ratio | Net Income | Earnings Per Share | Price/Earnings Ratio | |
| Intact Financial | N/A | N/A | N/A | $5.20 | 28.54 |
| Donegal Group | $848.22 million | 0.59 | -$1.96 million | ($0.32) | -47.34 |
Intact Financial has higher earnings, but lower revenue than Donegal Group. Donegal Group is trading at a lower price-to-earnings ratio than Intact Financial, indicating that it is currently the more affordable of the two stocks.
Insider & Institutional Ownership
43.1% of Intact Financial shares are owned by institutional investors. Comparatively, 28.1% of Donegal Group shares are owned by institutional investors. 6.6% of Donegal Group shares are owned by company insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a company will outperform the market over the long term.
Summary
Intact Financial beats Donegal Group on 8 of the 13 factors compared between the two stocks.
About Intact Financial
Intact Financial Corporation, through its subsidiaries, provides property and casualty insurance products to individuals and businesses in Canada, the United States, the United Kingdom, and internationally. It offers personal auto insurance; insurance for motor homes, recreational vehicles, motorcycles, snowmobiles, and all-terrain vehicles; personal property insurance, such as protection for homes and contents from risks, including fire, theft, vandalism, water damage, and other damages, as well as personal liability coverage; and property coverage for tenants, condominium owners, non-owner-occupied residences, and seasonal residences, as well as travel insurance. The company also provides commercial line insurance coverages for a diversified group of businesses; commercial property insurance for the protection of physical assets of the business; and liability coverages comprising commercial general, product, and professional liability, as well as cyber coverage. In addition, it offers commercial vehicle insurance coverages for the protection of commercial auto, fleets, garage operations, light trucks, public vehicles, and the specific needs of the sharing economy. Further, the company provides various personal levels of coverage to customers for their home, motor, pet, and other insurance products; general insurance, specialty lines, and risk management solutions; specialty insurance products for various product and customer groups, including accident and health, technology, ocean and inland marine, builder's risk, and entertainment, as well as financial services and institutions; and various products to specialty property, surety, tuition reimbursement, management liability, and cyber and environmental institutions. The company was formerly known as ING Canada Inc. and changed its name to Intact Financial Corporation in 2009. Intact Financial Corporation was founded in 1809 and is based in Toronto, Canada.
About Donegal Group
Donegal Group Inc., an insurance holding company, provides personal and commercial lines of 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 approximately 2,300 independent insurance agencies. Donegal Group Inc. was founded in 1889 and is headquartered in Marietta, Pennsylvania. Donegal Group Inc. operates as a subsidiary of Donegal Mutual Insurance Company.
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