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Donegal Group Inc. (DGICA)

Company Dividend Discount ModelIndustry: Insurance - Property & CasualtySector: Financial Services

Valuation Snapshot

Stable Growth$35.93 - $64.62$47.94
Multi-Stage$36.99 - $40.47$38.70
Blended Fair Value$43.32
Current Price$19.39
Upside123.42%
DecisionBuy

Dividend History & Growth Metrics (10Y)

Metric5Y CAGR10Y CAGR2024202320222021202020192018201720162015
DPS7.12%5.28%0.670.640.600.560.500.470.460.430.410.42
YoY Growth--3.69%6.78%7.35%12.51%5.49%2.77%5.65%5.23%-2.55%6.48%
Dividend Yield--3.39%4.62%3.93%4.17%3.35%3.10%3.45%2.75%2.34%2.95%

Stable Growth Model (Adjusted)

(USD in Millions except Per Share Data)
Net Income To Common (M)86.15
(-) Cash Dividends Paid (M)24.86
(=) Cash Retained (M)61.30
MetricLOWBASEHIGH
Required Retention Ratio20.0%12.5%7.5%
(=) Cash Required (M)17.2310.776.46
Cash Retained (M)61.3061.3061.30
(-) Cash Required (M)-17.23-10.77-6.46
(=) Excess Retained (M)44.0650.5354.83
(/) Shares Outstanding (M)34.1334.1334.13
(=) Excess Retained per Share1.291.481.61
LTM Dividend per Share0.730.730.73
(+) Excess Retained per Share1.291.481.61
(=) Adjusted Dividend2.022.212.34
WACC / Discount Rate9.08%9.08%9.08%
Growth Rate3.28%4.28%5.28%
Fair Value$35.93$47.94$64.62
Upside / Downside85.31%147.25%233.24%

Multi-Stage Model: Projections

(USD in Millions)
MetricTTMDec-27Dec-28Dec-29Dec-30Dec-31Terminal
Net Income (M)86.1589.8493.6897.68101.86106.22109.40
Payout Ratio28.85%41.08%53.31%65.54%77.77%90.00%92.50%
Projected Dividends (M)24.8636.9149.9464.0279.2295.59101.20

Multi-Stage Valuation

MetricLOWBASEHIGH
WACC / Discount Rate9.08%9.08%9.08%
Growth Rate3.28%4.28%5.28%
Year 1 PV (M)33.5133.8434.16
Year 2 PV (M)41.1741.9742.78
Year 3 PV (M)47.9249.3350.76
Year 4 PV (M)53.8455.9658.13
Year 5 PV (M)58.9961.9064.93
PV of Terminal Value (M)1,027.101,077.801,130.48
Equity Value (M)1,262.531,320.791,381.24
Shares Outstanding (M)34.1334.1334.13
Fair Value$36.99$38.70$40.47
Upside / Downside90.79%99.59%108.73%

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