Head to Head Survey: Donegal Group (NASDAQ:DGICB) and Allstate (NYSE:ALL)

Allstate (NYSE:ALL) and Donegal Group (NASDAQ:DGICB) are both finance companies, but which is the better investment? We will compare the two companies based on the strength of their dividends, profitability, institutional ownership, risk, analyst recommendations, earnings and valuation.

Profitability

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

	Net Margins	Return on Equity	Return on Assets
Allstate	17.81%	42.66%	9.39%
Donegal Group	6.77%	10.31%	2.69%

Risk and Volatility

Allstate has a beta of 0.21, indicating that its share price is 79% less volatile than the S&P 500. Comparatively, Donegal Group has a beta of 0.06, indicating that its share price is 94% less volatile than the S&P 500.

Earnings & Valuation

This table compares Allstate and Donegal Group”s revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Allstate	$67.69 billion	0.82	$10.28 billion	$45.33	4.78
Donegal Group	$978.01 million	0.72	$79.34 million	$1.69	11.21

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

Analyst Recommendations

This is a breakdown of current ratings for Allstate and Donegal Group, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Allstate	1	9	8	3	2.62
Donegal Group	0	1	0	0	2.00

Allstate presently has a consensus target price of $241.67, indicating a potential upside of 11.55%. Given Allstate’s stronger consensus rating and higher possible upside, equities research analysts clearly believe Allstate is more favorable than Donegal Group.

Insider & Institutional Ownership

76.5% of Allstate shares are owned by institutional investors. Comparatively, 1.2% of Donegal Group shares are owned by institutional investors. 1.6% of Allstate shares are owned by company insiders. Comparatively, 8.6% of Donegal Group shares are owned by company insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a company is poised for long-term growth.

Dividends

Allstate pays an annual dividend of $4.32 per share and has a dividend yield of 2.0%. Donegal Group pays an annual dividend of $0.70 per share and has a dividend yield of 3.7%. Allstate pays out 9.5% of its earnings in the form of a dividend. Donegal Group pays out 41.4% 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. Allstate has increased its dividend for 15 consecutive years and Donegal Group has increased its dividend for 5 consecutive years.

Summary

Allstate beats Donegal Group on 15 of the 18 factors compared between the two stocks.

About Allstate

The Allstate Corporation, together with its subsidiaries, provides property and casualty, and other insurance products in the United States and Canada. It operates in five segments: Allstate Protection; Protection Services; Allstate Health and Benefits; Run-off Property-Liability; and Corporate and Other segments. The Allstate Protection segment offers private passenger auto and homeowners insurance; other personal lines products; and commercial lines products through agents, contact centers, and online. The Protection Services segment provides consumer product protection; protection and insurance products, including vehicle service contracts, guaranteed asset protection, road hazard tire and wheel, and paintless dent repair protection; and roadside assistance, device and mobile data collection services, and analytic solutions using automotive telematics information, as well as identity theft protection and remediation services. This segment also offers its products under various brands, including Allstate Protection Plans, Allstate Dealer Services, Allstate Roadside, Arity, Avail, and Allstate Identity Protection. The Allstate Health and Benefits segment provides life, accident, critical illness, short-term disability, and other health insurance products; stop-loss and fully insured group health products to employers; and short-term medical and medicare supplement insurance to individuals. The Run-off Property-Liability segment offers property and casualty insurance coverage that primarily relates to policies written during the 1960s through the mid-1980s. The Corporate and Other segment provides debt services, as well as non-insurance operations. It sells its products through agents, independent agents, call and contact centers, retailers, direct to consumer, wholesale partners, and affinity groups, as well as through online and mobile applications. The Allstate Corporation was founded in 1931 and is headquartered in Northbrook, Illinois.

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.