Donegal Group Inc Stock Downgraded (DGICA)

NEW YORK (TheStreet) -- Donegal Group Inc (Nasdaq:DGICA) has been downgraded by TheStreet Ratings from buy to hold. The company's strengths can be seen in multiple areas, such as its revenue growth, largely solid financial position with reasonable debt levels by most measures and reasonable valuation levels. However, as a counter to these strengths, we also find weaknesses including feeble growth in the company's earnings per share, deteriorating net income and disappointing return on equity.

Highlights from the ratings report include:

• The revenue growth came in higher than the industry average of 7.0%. Since the same quarter one year prior, revenues rose by 13.9%. This growth in revenue does not appear to have trickled down to the company's bottom line, displayed by a decline in earnings per share.
• DGICA's debt-to-equity ratio is very low at 0.19 and is currently below that of the industry average, implying that there has been very successful management of debt levels.
• The company, on the basis of change in net income from the same quarter one year ago, has significantly underperformed when compared to that of the S&P 500 and the Insurance industry. The net income has significantly decreased by 83.3% when compared to the same quarter one year ago, falling from $4.91 million to $0.82 million.
• The company's current return on equity has slightly decreased from the same quarter one year prior. This implies a minor weakness in the organization. Compared to other companies in the Insurance industry and the overall market on the basis of return on equity, DONEGAL GROUP INC underperformed against that of the industry average and is significantly less than that of the S&P 500.

Donegal Group Inc., through its subsidiaries, offers personal and commercial lines of property and casualty insurance to businesses and individuals in the United States. The company has a P/E ratio of 57.7, below the average insurance industry P/E ratio of 58 and above the S&P 500 P/E ratio of 17.7. Donegal Group has a market cap of $288.2 million and is part of the financial sector and insurance industry. Shares are down 4% year to date as of the close of trading on Thursday.

You can view the full Donegal Group Ratings Report or get investment ideas from our investment research center.

For more information on Donegal Group Inc click any of the following:

• Donegal Group Inc Stock Price

• Donegal Group Inc Analyst Ratings

• Donegal Group Inc Key Stats & Profile

• Donegal Group Inc Earnings

• Donegal Group Inc Ratio Comparison

• Donegal Group Inc Growth Rates

• Donegal Group Inc Balance Sheet

• Donegal Group Inc Cash Flow

• Donegal Group Inc Income Statement