Citizens (NYSE:CIA) versus Donegal Group (NASDAQ:DGICB) Critical Contrast

Donegal Group (NASDAQ:DGICB) and Citizens (NYSE:CIA) are both small-cap finance companies, but which is the superior business? We will contrast the two companies based on the strength of their risk, dividends, profitability, valuation, institutional ownership, earnings and analyst recommendations.

Volatility & Risk

Donegal Group has a beta of 0.04, indicating that its stock price is 96% less volatile than the S&P 500. Comparatively, Citizens has a beta of 0.43, indicating that its stock price is 57% less volatile than the S&P 500.

Earnings and Valuation

This table compares Donegal Group and Citizens”s gross 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	0.68	$79.34 million	$1.78	10.05
Citizens	$255.62 million	0.81	$14.59 million	$0.21	17.70

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

Analyst Recommendations

This is a breakdown of current recommendations and price targets for Donegal Group and Citizens, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Donegal Group	0	1	0	0	2.00
Citizens	0	1	2	0	2.67

Citizens has a consensus price target of $5.50, suggesting a potential upside of 48.01%. Given Citizens’ stronger consensus rating and higher possible upside, analysts plainly believe Citizens is more favorable than Donegal Group.

Profitability

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

	Net Margins	Return on Equity	Return on Assets
Donegal Group	7.38%	10.65%	2.83%
Citizens	4.55%	4.73%	0.63%

Insider & Institutional Ownership

1.2% of Donegal Group shares are owned by institutional investors. Comparatively, 13.7% of Citizens shares are owned by institutional investors. 8.6% of Donegal Group shares are owned by company insiders. Comparatively, 2.2% of Citizens shares are owned by company insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a company will outperform the market over the long term.

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 Citizens

Citizens, Inc. provides life insurance products in the United States and internationally. The company operates in two segments, Life Insurance and Home Service Insurance. The Life Insurance segment issues ordinary whole life insurance and endowment policies in the United States dollar-denominated amounts to non-U.S. residents in through independent marketing agencies and consultants. The Home Service Insurance segment offers final expense life insurance and property insurance policies to middle-and lower-income households, as well as whole life products in Louisiana, Mississippi, and Arkansas. This segment provides its products and services through funeral homes and independent agents. The company provides accident and health insurance policies. Citizens, Inc. was founded in 1969 and is headquartered in Austin, Texas.