Critical Survey: F&G Annuities & Life (NYSE:FG) versus Donegal Group (NASDAQ:DGICB)

Donegal Group (NASDAQ:DGICB) and F&G Annuities & Life (NYSE:FG) are both finance companies, but which is the better business? We will compare the two companies based on the strength of their dividends, institutional ownership, profitability, earnings, analyst recommendations, valuation and risk.

Dividends

Donegal Group pays an annual dividend of $0.70 per share and has a dividend yield of 3.0%. F&G Annuities & Life pays an annual dividend of $1.00 per share and has a dividend yield of 4.5%. Donegal Group pays out 40.7% of its earnings in the form of a dividend. F&G Annuities & Life pays out 34.1% 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 5 consecutive years and F&G Annuities & Life has raised its dividend for 2 consecutive years. F&G Annuities & Life is clearly the better dividend stock, given its higher yield and lower payout ratio.

Risk and Volatility

Donegal Group has a beta of -0.1, suggesting that its stock price is 110% less volatile than the S&P 500. Comparatively, F&G Annuities & Life has a beta of 1.2, suggesting that its stock price is 20% more volatile than the S&P 500.

Analyst Ratings

This is a breakdown of current ratings and recommmendations for Donegal Group and F&G Annuities & Life, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Donegal Group	0	1	0	0	2.00
F&G Annuities & Life	2	2	0	0	1.50

F&G Annuities & Life has a consensus price target of $24.00, suggesting a potential upside of 8.74%. Given F&G Annuities & Life’s higher probable upside, analysts clearly believe F&G Annuities & Life is more favorable than Donegal Group.

Valuation & Earnings

This table compares Donegal Group and F&G Annuities & Life”s revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Donegal Group	$978.01 million	0.90	$79.34 million	$1.72	13.74
F&G Annuities & Life	$5.73 billion	0.50	$265.00 million	$2.93	7.53

F&G Annuities & Life has higher revenue and earnings than Donegal Group. F&G Annuities & Life 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 Donegal Group and F&G Annuities & Life’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Donegal Group	7.24%	10.49%	2.80%
F&G Annuities & Life	6.89%	10.28%	0.50%

Institutional and Insider Ownership

1.2% of Donegal Group shares are held by institutional investors. Comparatively, 95.9% of F&G Annuities & Life shares are held by institutional investors. 8.6% of Donegal Group shares are held by insiders. Comparatively, 2.5% of F&G Annuities & Life shares are held by insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a stock is poised for long-term growth.

About Donegal Group

Donegal Group Inc., an insurance holding company, provides personal and commercial lines of property and casualty insurance to businesses and individuals in the Mid-Atlantic, Midwestern, New England, and southern states. It operates through four 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. It also offers homeowners policies, which provide coverage for damage to residences and their contents from a range of perils, including fire, lightning, windstorm, and theft; and liability of the insured arising from injury to other persons or their property. In addition, the company 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 various perils, primarily 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 through a network of approximately 2,400 independent insurance agencies. Donegal Group Inc. was founded in 1986 and is headquartered in Marietta, Pennsylvania.

About F&G Annuities & Life

F&G Annuities & Life, Inc. engages in the provision of fixed annuity and life insurance products. It specializes in life insurance, annuities, retirement planning and wealth transfer. The company was founded in 1959 and is headquartered in Des Moines, IA.