Comparing Donegal Group (NASDAQ:DGICA) & Goosehead Insurance (NASDAQ:GSHD)
by Scott Moore · The Cerbat GemGoosehead Insurance (NASDAQ:GSHD – Get Free Report) and Donegal Group (NASDAQ:DGICA – Get Free Report) are both small-cap finance companies, but which is the better business? We will contrast the two companies based on the strength of their institutional ownership, dividends, profitability, earnings, analyst recommendations, risk and valuation.
Profitability
This table compares Goosehead Insurance and Donegal Group’s net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets | |
| Goosehead Insurance | 8.78% | -21.00% | 9.43% |
| Donegal Group | 7.38% | 10.65% | 2.83% |
Insider & Institutional Ownership
28.0% of Donegal Group shares are held by institutional investors. 38.1% of Goosehead Insurance shares are held by company insiders. Comparatively, 2.8% of Donegal Group shares are held by company insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a company is poised for long-term growth.
Risk & Volatility
Goosehead Insurance has a beta of 1.46, indicating that its share price is 46% more volatile than the S&P 500. Comparatively, Donegal Group has a beta of -0.03, indicating that its share price is 103% less volatile than the S&P 500.
Analyst Recommendations
This is a summary of current recommendations and price targets for Goosehead Insurance and Donegal Group, as provided by MarketBeat.com.
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score | |
| Goosehead Insurance | 1 | 6 | 7 | 1 | 2.53 |
| Donegal Group | 1 | 1 | 1 | 0 | 2.00 |
Goosehead Insurance presently has a consensus target price of $68.45, suggesting a potential upside of 50.42%. Donegal Group has a consensus target price of $20.00, suggesting a potential upside of 9.47%. Given Goosehead Insurance’s stronger consensus rating and higher probable upside, research analysts clearly believe Goosehead Insurance is more favorable than Donegal Group.
Earnings and Valuation
This table compares Goosehead Insurance and Donegal Group”s top-line revenue, earnings per share (EPS) and valuation.
| Gross Revenue | Price/Sales Ratio | Net Income | Earnings Per Share | Price/Earnings Ratio | |
| Goosehead Insurance | $365.30 million | 4.43 | $27.83 million | $1.37 | 33.22 |
| Donegal Group | $978.01 million | 0.69 | $79.34 million | $1.93 | 9.47 |
Donegal Group has higher revenue and earnings than Goosehead Insurance. Donegal Group is trading at a lower price-to-earnings ratio than Goosehead Insurance, indicating that it is currently the more affordable of the two stocks.
Summary
Goosehead Insurance beats Donegal Group on 10 of the 15 factors compared between the two stocks.
About Goosehead Insurance
Goosehead Insurance, Inc. operates as a holding company for Goosehead Financial, LLC that engages in the provision of personal lines insurance agency services in the United States. The company offers homeowner’s, automotive, dwelling property, flood, wind, earthquake, excess liability or umbrella, motorcycle, recreational vehicle, general liability, property, and life insurance products and services. As of December 31, 2023, it operated 1,415 franchise locations. The company was founded in 2003 and is headquartered in Westlake, Texas.
About Donegal Group
Donegal Group Inc., an insurance holding company, provides property and casualty insurance to businesses and individuals. It operates through three 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; and homeowners policies, which provide coverage for damage to residences and their contents from a range of perils, including fire, lightning, windstorm, and theft, as well as liability of the insured arising from injury to other persons or their property. It also 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 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 primarily to Mid-Atlantic, Midwestern, New England, Southern, and Southwestern regions through independent insurance agencies. Donegal Group Inc. was incorporated in 1986 and is based in Marietta, Pennsylvania. Donegal Group Inc. operates as a subsidiary of Donegal Mutual Insurance Company.