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Donegal Group Inc. (DGICA)

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

Valuation Snapshot

Stable Growth$35.82 - $64.31$47.76
Multi-Stage$36.88 - $40.34$38.58
Blended Fair Value$43.17
Current Price$19.39
Upside122.64%
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 Rate9.10%9.10%9.10%
Growth Rate3.28%4.28%5.28%
Fair Value$35.82$47.76$64.31
Upside / Downside84.74%146.32%231.67%

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 Rate9.10%9.10%9.10%
Growth Rate3.28%4.28%5.28%
Year 1 PV (M)33.5133.8334.15
Year 2 PV (M)41.1641.9642.77
Year 3 PV (M)47.9049.3050.74
Year 4 PV (M)53.8055.9258.09
Year 5 PV (M)58.9461.8564.87
PV of Terminal Value (M)1,023.221,073.731,126.21
Equity Value (M)1,258.531,316.591,376.84
Shares Outstanding (M)34.1334.1334.13
Fair Value$36.88$38.58$40.34
Upside / Downside90.18%98.96%108.06%

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