Endurance Specialty Holdings (NYSE: ENH) and Donegal Group (NASDAQ:DGICA) are both financials companies, but which is the superior investment? We will contrast the two businesses based on the strength of their institutional ownership, dividends, analyst recommendations, profitability, risk, earnings and valuation.

Analyst Recommendations

This is a summary of recent ratings for Endurance Specialty Holdings and Donegal Group, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Endurance Specialty Holdings 0 4 0 0 2.00
Donegal Group 0 2 0 0 2.00

Endurance Specialty Holdings presently has a consensus target price of $93.00, suggesting a potential upside of 0.02%. Donegal Group has a consensus target price of $18.00, suggesting a potential upside of 18.42%. Given Donegal Group’s higher possible upside, analysts clearly believe Donegal Group is more favorable than Endurance Specialty Holdings.

Institutional & Insider Ownership

82.7% of Endurance Specialty Holdings shares are held by institutional investors. Comparatively, 29.5% of Donegal Group shares are held by institutional investors. 5.8% of Endurance Specialty Holdings shares are held by insiders. Comparatively, 11.9% of Donegal Group shares are held by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a company is poised for long-term growth.

Volatility & Risk

Endurance Specialty Holdings has a beta of 0.56, indicating that its stock price is 44% less volatile than the S&P 500. Comparatively, Donegal Group has a beta of 0.29, indicating that its stock price is 71% less volatile than the S&P 500.

Earnings and Valuation

This table compares Endurance Specialty Holdings and Donegal Group’s gross revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
Endurance Specialty Holdings N/A N/A N/A $6.00 15.50
Donegal Group $715.06 million 0.58 $24.38 million $0.49 31.02

Donegal Group has higher revenue and earnings than Endurance Specialty Holdings. Endurance Specialty Holdings is trading at a lower price-to-earnings ratio than Donegal Group, indicating that it is currently the more affordable of the two stocks.

Profitability

This table compares Endurance Specialty Holdings and Donegal Group’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Endurance Specialty Holdings 4.79% 1.62% 0.82%
Donegal Group 1.84% 2.24% 0.60%

Dividends

Endurance Specialty Holdings pays an annual dividend of $1.52 per share and has a dividend yield of 1.6%. Donegal Group pays an annual dividend of $0.56 per share and has a dividend yield of 3.7%. Endurance Specialty Holdings pays out 25.3% 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. Donegal Group has raised its dividend for 6 consecutive years. Donegal Group is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

About Endurance Specialty Holdings

Endurance Specialty Holdings Ltd. is a holding company. The Company, through its operating subsidiaries in Bermuda, the United States and the United Kingdom, focuses on underwriting specialty lines of personal and commercial property, and casualty insurance and reinsurance. It operates through two segments: Insurance and Reinsurance. In the Insurance segment, it writes agriculture, casualty and other specialty, professional lines, and property, marine/energy and aviation insurance. In the Reinsurance segment, it writes catastrophe, property, casualty, professional lines and specialty reinsurance. Its Insurance and Reinsurance segments both include property-related coverages, which provide insurance or reinsurance of an insurable interest in tangible property for property loss, damage or loss of use. In addition, its Insurance and Reinsurance segments include various casualty insurance and reinsurance coverages, which are concerned with the losses caused by injuries to third parties.

About Donegal Group

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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