Ambac Financial Group (NYSE:AMBC – Get Free Report) and Donegal Group (NASDAQ:DGICA – Get Free Report) are both small-cap finance companies, but which is the better investment? We will compare the two businesses based on the strength of their risk, analyst recommendations, profitability, dividends, institutional ownership, earnings and valuation.
Earnings and Valuation
This table compares Ambac Financial Group and Donegal Group”s gross revenue, earnings per share and valuation.
| Gross Revenue | Price/Sales Ratio | Net Income | Earnings Per Share | Price/Earnings Ratio | |
| Ambac Financial Group | $235.82 million | 1.62 | -$556.45 million | ($13.62) | -0.60 |
| Donegal Group | $989.60 million | 0.70 | $50.86 million | $2.38 | 7.92 |
Profitability
This table compares Ambac Financial Group and Donegal Group’s net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets | |
| Ambac Financial Group | -215.40% | -3.50% | -0.49% |
| Donegal Group | 8.33% | 14.33% | 3.41% |
Analyst Ratings
This is a summary of recent recommendations and price targets for Ambac Financial Group and Donegal Group, as provided by MarketBeat.
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score | |
| Ambac Financial Group | 1 | 0 | 1 | 0 | 2.00 |
| Donegal Group | 0 | 1 | 2 | 1 | 3.00 |
Ambac Financial Group presently has a consensus price target of $10.00, indicating a potential upside of 21.36%. Donegal Group has a consensus price target of $18.00, indicating a potential downside of 4.46%. Given Ambac Financial Group’s higher possible upside, equities analysts clearly believe Ambac Financial Group is more favorable than Donegal Group.
Institutional and Insider Ownership
84.5% of Ambac Financial Group shares are held by institutional investors. Comparatively, 28.0% of Donegal Group shares are held by institutional investors. 6.2% of Ambac Financial Group shares are held by insiders. Comparatively, 3.5% of Donegal Group shares are held by insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a stock is poised for long-term growth.
Summary
Donegal Group beats Ambac Financial Group on 10 of the 14 factors compared between the two stocks.
About Ambac Financial Group
Ambac Financial Group, Inc. operates as a financial services holding company. It operates three businesses: Specialty Property and Casualty Insurance, Insurance Distribution, and Legacy Financial Guarantee (LFG) Insurance. The Specialty Property and Casualty Insurance business provides specialty property and casualty program insurance with a focus commercial and personal liability risks. The Insurance Distribution business includes the specialty property and casualty insurance distribution business, which includes managing general agents and underwriters, insurance wholesalers, brokers, and other distribution businesses. The LFG Insurance business offers financial guarantee insurance policies that provide an unconditional and irrevocable guarantee, which protects the holder of a debt obligation against non-payment when due of the principal and interest on the obligations guaranteed. Ambac Financial Group, Inc. was incorporated in 1991 and is headquartered in New York, New York.
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.
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