Donegal Group Inc. logo DGICA - Donegal Group Inc.

Price: -- -- | CONSENSUS: Buy DETAILS
STRONG
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BUY 1
HOLD 1
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STRONG
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AlphaVal

AlphaVal

Deterministic, archetype-aware fair value

Banks, Insurers & Asset Managers 85% confidence

Primary model: P/Tangible Book × ROE Quality

Valuation Signal Undervalued Strong
Trading 71.9% below fair value
Current Price $17.34
Bear Case $50.34 190.3% upside ($50.34 - $17.34) / $17.34 = 190.3% ROTCE 10.5% → 3.26x TBV
Fair Value $61.69 255.7% upside ($61.69 - $17.34) / $17.34 = 255.7% ROTCE 14.0% → 4.00x TBV
Bull Case $61.69 255.7% upside ($61.69 - $17.34) / $17.34 = 255.7% ROTCE 16.1% → 4.00x TBV

Adjust Assumptions

14.0%
6.0%

Key Value Driver

ROTCE (14.0%) vs. cost of equity (6.0%)

Implied Market Multiple 1.12x

Plain-Language Summary

With ROTCE of 14.0% vs. 6.0% cost of equity, fair P/TBV is 4.00x on $15.42 tangible book, implying $61.69 per share. DDM cross-check: $23.67.

Warnings

⚠ Traditional cash flow models don't work well for banks — lending activity distorts how much cash the business actually generates.
⚠ Common valuation shortcuts don't apply here — for banks, interest payments are a core business cost, not overhead.
ℹ Dividend-based valuation: $23.67 (62% below our primary estimate). Large gaps suggest the dividend may not fully reflect the company's value.

Key Risks

  • Book value quality matters as much as level — check loan loss reserves
  • Interest rate sensitivity creates non-linear earnings surprises
  • Insurance reserving is actuarial, not financial — errors emerge slowly