Definitive Analysis
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Definitive Analysis

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Ticker

Industry

Sector

Donegal Group Inc. (DGICA)

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

Valuation Snapshot

Stable Growth$57.72 - $152.38$88.14
Multi-Stage$59.45 - $65.18$62.26
Blended Fair Value$75.20
Current Price$19.39
Upside287.84%
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 Rate6.89%6.89%6.89%
Growth Rate3.28%4.28%5.28%
Fair Value$57.72$88.14$152.38
Upside / Downside197.70%354.56%685.87%

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 Rate6.89%6.89%6.89%
Growth Rate3.28%4.28%5.28%
Year 1 PV (M)34.2034.5334.86
Year 2 PV (M)42.8843.7144.55
Year 3 PV (M)50.9352.4353.95
Year 4 PV (M)58.3960.6963.05
Year 5 PV (M)65.2968.5171.86
PV of Terminal Value (M)1,777.321,865.051,956.21
Equity Value (M)2,029.012,124.922,224.49
Shares Outstanding (M)34.1334.1334.13
Fair Value$59.45$62.26$65.18
Upside / Downside206.62%221.11%236.16%

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