MERCURY GENERAL CORP (MCY) Stock Fundamental Analysis
NYSE:MCY - New York Stock Exchange, Inc. - US5894001008 - Common Stock - Currency: USD
MCY gets a fundamental rating of 5 out of 10. The analysis compared the fundamentals against 143 industry peers in the Insurance industry. Both the profitability and the financial health of MCY get a neutral evaluation. Nothing too spectacular is happening here. MCY is not valued too expensively and it also shows a decent growth rate.
1. Profitability
1.1 Basic Checks
In the past year MCY was profitable.
In the past year MCY had a positive cash flow from operations.
Of the past 5 years MCY 4 years were profitable.
Each year in the past 5 years MCY had a positive operating cash flow.
1.2 Ratios
With an excellent Return On Assets value of 5.63%, MCY belongs to the best of the industry, outperforming 82.98% of the companies in the same industry.
With an excellent Return On Equity value of 24.04%, MCY belongs to the best of the industry, outperforming 88.65% of the companies in the same industry.
MCY has a better Return On Invested Capital (6.72%) than 84.40% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 5.63% | ||
| ROE | 24.04% | ||
| ROIC | 6.72% |
ROA(3y)-0.29%
ROA(5y)1.74%
ROE(3y)-1.14%
ROE(5y)5.32%
ROIC(3y)N/A
ROIC(5y)N/A
1.3 Margins
MCY has a Profit Margin of 8.55%. This is comparable to the rest of the industry: MCY outperforms 55.32% of its industry peers.
MCY's Profit Margin has been stable in the last couple of years.
MCY has a Operating Margin (11.06%) which is in line with its industry peers.
MCY's Operating Margin has improved in the last couple of years.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 11.06% | ||
| PM (TTM) | 8.55% | ||
| GM | N/A |
OM growth 3Y11.77%
OM growth 5Y2.15%
PM growth 3Y11.24%
PM growth 5Y1.18%
GM growth 3YN/A
GM growth 5YN/A
2. Health
2.1 Basic Checks
With a Return on Invested Capital (ROIC) below the Cost of Capital (WACC), MCY is destroying value.
Compared to 1 year ago, MCY has about the same amount of shares outstanding.
MCY has about the same amout of shares outstanding than it did 5 years ago.
Compared to 1 year ago, MCY has an improved debt to assets ratio.
2.2 Solvency
MCY has an Altman-Z score of 1.45. This is a bad value and indicates that MCY is not financially healthy and even has some risk of bankruptcy.
MCY has a Altman-Z score of 1.45. This is amongst the best in the industry. MCY outperforms 81.56% of its industry peers.
MCY has a debt to FCF ratio of 0.58. This is a very positive value and a sign of high solvency as it would only need 0.58 years to pay back of all of its debts.
MCY has a Debt to FCF ratio of 0.58. This is in the better half of the industry: MCY outperforms 76.60% of its industry peers.
MCY has a Debt/Equity ratio of 0.29. This is a healthy value indicating a solid balance between debt and equity.
Looking at the Debt to Equity ratio, with a value of 0.29, MCY is in line with its industry, outperforming 58.16% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.29 | ||
| Debt/FCF | 0.58 | ||
| Altman-Z | 1.45 |
ROIC/WACC0.8
WACC8.39%
2.3 Liquidity
MCY has a Current Ratio of 0.22. This is a bad value and indicates that MCY is not financially healthy enough and could expect problems in meeting its short term obligations.
MCY's Current ratio of 0.22 is fine compared to the rest of the industry. MCY outperforms 70.21% of its industry peers.
MCY has a Quick Ratio of 0.22. This is a bad value and indicates that MCY is not financially healthy enough and could expect problems in meeting its short term obligations.
MCY's Quick ratio of 0.22 is fine compared to the rest of the industry. MCY outperforms 70.21% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 0.22 | ||
| Quick Ratio | 0.22 |
3. Growth
3.1 Past
The Earnings Per Share has grown by an impressive 2296.67% over the past year.
The Earnings Per Share has been growing by 22.56% on average over the past years. This is a very strong growth
MCY shows quite a strong growth in Revenue. In the last year, the Revenue has grown by 18.27%.
Measured over the past years, MCY shows a small growth in Revenue. The Revenue has been growing by 6.63% on average per year.
EPS 1Y (TTM)2296.67%
EPS 3Y35.66%
EPS 5Y22.56%
EPS Q2Q%141.74%
Revenue 1Y (TTM)18.27%
Revenue growth 3Y11.1%
Revenue growth 5Y6.63%
Sales Q2Q%-0.62%
3.2 Future
Based on estimates for the next years, MCY will show a decrease in Earnings Per Share. The EPS will decrease by -9.16% on average per year.
Based on estimates for the next years, MCY will show a small growth in Revenue. The Revenue will grow by 7.27% on average per year.
EPS Next Y-79.63%
EPS Next 2Y-9.16%
EPS Next 3YN/A
EPS Next 5YN/A
Revenue Next Year7.42%
Revenue Next 2Y7.27%
Revenue Next 3YN/A
Revenue Next 5YN/A
3.3 Evolution
The EPS growth rate is decreasing: in the next years the growth will be less than in the last years.
The Revenue growth rate is stable: in the next years the growth will be about the same than in the last years.
4. Valuation
4.1 Price/Earnings Ratio
The Price/Earnings ratio is 7.26, which indicates a rather cheap valuation of MCY.
MCY's Price/Earnings ratio is a bit cheaper when compared to the industry. MCY is cheaper than 74.47% of the companies in the same industry.
Compared to an average S&P500 Price/Earnings ratio of 29.63, MCY is valued rather cheaply.
With a Price/Forward Earnings ratio of 35.66, MCY can be considered very expensive at the moment.
Compared to the rest of the industry, the Price/Forward Earnings ratio of MCY indicates a slightly more expensive valuation: MCY is more expensive than 78.01% of the companies listed in the same industry.
When comparing the Price/Forward Earnings ratio of MCY to the average of the S&P500 Index (22.68), we can say MCY is valued expensively.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 7.26 | ||
| Fwd PE | 35.66 |
4.2 Price Multiples
Based on the Enterprise Value to EBITDA ratio, MCY is valued cheaply inside the industry as 83.69% of the companies are valued more expensively.
80.14% of the companies in the same industry are more expensive than MCY, based on the Price/Free Cash Flow ratio.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 2.92 | ||
| EV/EBITDA | 4.31 |
4.3 Compensation for Growth
MCY has a very decent profitability rating, which may justify a higher PE ratio.
A cheap valuation may be justified as MCY's earnings are expected to decrease with -9.16% in the coming years.
PEG (NY)N/A
PEG (5Y)0.32
EPS Next 2Y-9.16%
EPS Next 3YN/A
5. Dividend
5.1 Amount
MCY has a Yearly Dividend Yield of 2.40%. Purely for dividend investing, there may be better candidates out there.
In the last 3 months the price of MCY has falen by -32.41%. A price decline artificially increases the dividend yield. It may be a sign investors do not expect the dividend to last.
Compared to an average industry Dividend Yield of 3.09, MCY pays a bit more dividend than its industry peers.
MCY's Dividend Yield is comparable with the S&P500 average which is at 2.29.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 2.4% |
5.2 History
The dividend of MCY decreases each year by -12.76%.
MCY has paid a dividend for at least 10 years, which is a reliable track record.
The dividend of MCY decreased recently.
Dividend Growth(5Y)-12.76%
Div Incr Years0
Div Non Decr Years1
5.3 Sustainability
15.03% of the earnings are spent on dividend by MCY. This is a low number and sustainable payout ratio.
MCY's earnings and Dividend Rate are declining. This means the current dividend is most likely not sustainable.
DP15.03%
EPS Next 2Y-9.16%
EPS Next 3YN/A
52.23
-0.05 (-0.1%)
Chartmill FA Rating
GICS SectorFinancials
GICS IndustryGroupInsurance
GICS IndustryInsurance
Earnings (Last)
Earnings (Next)
Inst Owners43.78%
Inst Owner Change9.24%
Ins Owners35.5%
Ins Owner Change-0.01%
Market Cap2.89B
Analysts76.67
Price Target81.6 (56.23%)
Short Float %7.76%
Short Ratio2.61
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 2.4% |
Yearly Dividend1.27
Dividend Growth(5Y)-12.76%
DP15.03%
Div Incr Years0
Div Non Decr Years1
Ex-Date
Surprises & Revisions
EPS beat(2)2
Avg EPS beat(2)96.84%
Min EPS beat(2)47.93%
Max EPS beat(2)145.76%
EPS beat(4)4
Avg EPS beat(4)186.6%
Min EPS beat(4)34.9%
Max EPS beat(4)517.82%
EPS beat(8)6
Avg EPS beat(8)233.65%
EPS beat(12)7
Avg EPS beat(12)88.03%
EPS beat(16)8
Avg EPS beat(16)55.79%
Revenue beat(2)1
Avg Revenue beat(2)3.68%
Min Revenue beat(2)-3.38%
Max Revenue beat(2)10.74%
Revenue beat(4)2
Avg Revenue beat(4)1.71%
Min Revenue beat(4)-3.38%
Max Revenue beat(4)10.74%
Revenue beat(8)4
Avg Revenue beat(8)2.96%
Revenue beat(12)5
Avg Revenue beat(12)-2.3%
Revenue beat(16)8
Avg Revenue beat(16)-0.76%
PT rev (1m)-12.5%
PT rev (3m)-12.5%
EPS NQ rev (1m)-36.72%
EPS NQ rev (3m)-42.27%
EPS NY rev (1m)-10.53%
EPS NY rev (3m)-10.53%
Revenue NQ rev (1m)0%
Revenue NQ rev (3m)0%
Revenue NY rev (1m)0%
Revenue NY rev (3m)0%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 7.26 | ||
| Fwd PE | 35.66 | ||
| P/S | 0.53 | ||
| P/FCF | 2.92 | ||
| P/OCF | 2.79 | ||
| P/B | 1.49 | ||
| P/tB | 1.53 | ||
| EV/EBITDA | 4.31 |
EPS(TTM)7.19
EY13.77%
EPS(NY)1.46
Fwd EY2.8%
FCF(TTM)17.89
FCFY34.25%
OCF(TTM)18.72
OCFY35.85%
SpS98.86
BVpS35.14
TBVpS34.23
PEG (NY)N/A
PEG (5Y)0.32
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 5.63% | ||
| ROE | 24.04% | ||
| ROCE | 7.54% | ||
| ROIC | 6.72% | ||
| ROICexc | 7.38% | ||
| ROICexgc | 7.62% | ||
| OM | 11.06% | ||
| PM (TTM) | 8.55% | ||
| GM | N/A | ||
| FCFM | 18.1% |
ROA(3y)-0.29%
ROA(5y)1.74%
ROE(3y)-1.14%
ROE(5y)5.32%
ROIC(3y)N/A
ROIC(5y)N/A
ROICexc(3y)N/A
ROICexc(5y)N/A
ROICexgc(3y)N/A
ROICexgc(5y)N/A
ROCE(3y)N/A
ROCE(5y)N/A
ROICexcg growth 3Y17.76%
ROICexcg growth 5Y2.29%
ROICexc growth 3Y17.72%
ROICexc growth 5Y2.52%
OM growth 3Y11.77%
OM growth 5Y2.15%
PM growth 3Y11.24%
PM growth 5Y1.18%
GM growth 3YN/A
GM growth 5YN/A
F-Score8
Asset Turnover0.66
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.29 | ||
| Debt/FCF | 0.58 | ||
| Debt/EBITDA | 0.9 | ||
| Cap/Depr | 144.43% | ||
| Cap/Sales | 0.84% | ||
| Interest Coverage | 20.14 | ||
| Cash Conversion | 162.65% | ||
| Profit Quality | 211.77% | ||
| Current Ratio | 0.22 | ||
| Quick Ratio | 0.22 | ||
| Altman-Z | 1.45 |
F-Score8
WACC8.39%
ROIC/WACC0.8
Cap/Depr(3y)91.44%
Cap/Depr(5y)81.7%
Cap/Sales(3y)0.87%
Cap/Sales(5y)0.94%
Profit Quality(3y)N/A
Profit Quality(5y)N/A
High Growth Momentum
Growth
EPS 1Y (TTM)2296.67%
EPS 3Y35.66%
EPS 5Y22.56%
EPS Q2Q%141.74%
EPS Next Y-79.63%
EPS Next 2Y-9.16%
EPS Next 3YN/A
EPS Next 5YN/A
Revenue 1Y (TTM)18.27%
Revenue growth 3Y11.1%
Revenue growth 5Y6.63%
Sales Q2Q%-0.62%
Revenue Next Year7.42%
Revenue Next 2Y7.27%
Revenue Next 3YN/A
Revenue Next 5YN/A
EBIT growth 1Y389.99%
EBIT growth 3Y24.17%
EBIT growth 5Y8.92%
EBIT Next YearN/A
EBIT Next 3YN/A
EBIT Next 5YN/A
FCF growth 1Y138.11%
FCF growth 3Y29.13%
FCF growth 5Y15.62%
OCF growth 1Y128.95%
OCF growth 3Y27.4%
OCF growth 5Y14.82%