Overall MCY gets a fundamental rating of 5 out of 10. We evaluated MCY against 148 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.

Quickly go to:

1. Profitability

2. Health

3. Growth

4. Valuation

5. Dividend

1. Profitability

1.1 Basic Checks

MCY had positive earnings in the past year.
MCY had a positive operating cash flow in the past year.
MCY had positive earnings in 4 of the past 5 years.
MCY had a positive operating cash flow in each of the past 5 years.

1.2 Ratios

MCY has a better Return On Assets (4.69%) than 80.41% of its industry peers.
With an excellent Return On Equity value of 19.69%, MCY belongs to the best of the industry, outperforming 86.49% of the companies in the same industry.
Looking at the Return On Invested Capital, with a value of 5.71%, MCY belongs to the top of the industry, outperforming 83.78% of the companies in the same industry.

		Industry Rank	Sector Rank
ROA	4.69%
ROE	19.69%
ROIC	5.71%

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's Profit Margin of 7.55% is in line compared to the rest of the industry. MCY outperforms 46.62% of its industry peers.
MCY's Profit Margin has been stable in the last couple of years.
Looking at the Operating Margin, with a value of 9.74%, MCY is doing worse than 61.49% of the companies in the same industry.
In the last couple of years the Operating Margin of MCY has grown nicely.

		Industry Rank	Sector Rank
OM	9.74%
PM (TTM)	7.55%
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

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ROA

ROE

ROIC

Operating and Profit Margin

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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.
The number of shares outstanding for MCY remains at a similar level compared to 5 years ago.
The debt/assets ratio for MCY has been reduced compared to a year ago.

2.2 Solvency

MCY has an Altman-Z score of 1.49. 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 1.49. This is amongst the best in the industry. MCY outperforms 85.14% of its industry peers.
The Debt to FCF ratio of MCY is 0.58, which is an excellent value as it means it would take MCY, only 0.58 years of fcf income to pay off all of its debts.
Looking at the Debt to FCF ratio, with a value of 0.58, MCY is in the better half of the industry, outperforming 79.05% of the companies in the same industry.
MCY has a Debt/Equity ratio of 0.26. This is a healthy value indicating a solid balance between debt and equity.
MCY has a better Debt to Equity ratio (0.26) than 62.16% of its industry peers.

		Industry Rank	Sector Rank
Debt/Equity	0.26
Debt/FCF	0.58
Altman-Z	1.49

ROIC/WACC0.68

WACC8.45%

2.3 Liquidity

A Current Ratio of 0.12 indicates that MCY may have some problems paying its short term obligations.
MCY has a Current ratio of 0.12. This is in the better half of the industry: MCY outperforms 64.19% of its industry peers.
MCY has a Quick Ratio of 0.12. This is a bad value and indicates that MCY is not financially healthy enough and could expect problems in meeting its short term obligations.
The Quick ratio of MCY (0.12) is better than 64.19% of its industry peers.

		Industry Rank	Sector Rank
Current Ratio	0.12
Quick Ratio	0.12

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WACC

Debt/Equity

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Altman-Z score

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3. Growth

3.1 Past

The Earnings Per Share has grown by an impressive 26.26% over the past year.
MCY shows a strong growth in Earnings Per Share. Measured over the last years, the EPS has been growing by 22.56% yearly.
The Revenue has been growing slightly by 6.18% in the past year.
MCY shows a small growth in Revenue. Measured over the last years, the Revenue has been growing by 6.63% yearly.

EPS 1Y (TTM)26.26%

EPS 3Y35.66%

EPS 5Y22.56%

EPS Q2Q%51.97%

Revenue 1Y (TTM)6.18%

Revenue growth 3Y11.1%

Revenue growth 5Y6.63%

Sales Q2Q%3.56%

3.2 Future

Based on estimates for the next years, MCY will show a small growth in Earnings Per Share. The EPS will grow by 2.87% on average per year.
The Revenue is expected to grow by 6.18% on average over the next years.

EPS Next Y-4.48%

EPS Next 2Y8.63%

EPS Next 3Y2.87%

EPS Next 5YN/A

Revenue Next Year8.27%

Revenue Next 2Y6.31%

Revenue Next 3Y6.18%

Revenue Next 5YN/A

3.3 Evolution

When comparing the EPS growth rate of the last years to the growth rate of the upcoming years, we see that the growth is decreasing.
When comparing the Revenue growth rate of the last years to the growth rate of the upcoming years, we see that the growth is stable.

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4. Valuation

4.1 Price/Earnings Ratio

Based on the Price/Earnings ratio of 12.48, the valuation of MCY can be described as correct.
MCY's Price/Earnings ratio is in line with the industry average.
When comparing the Price/Earnings ratio of MCY to the average of the S&P500 Index (28.30), we can say MCY is valued rather cheaply.
MCY is valuated reasonably with a Price/Forward Earnings ratio of 10.32.
MCY's Price/Forward Earnings ratio is in line with the industry average.
MCY's Price/Forward Earnings ratio indicates a rather cheap valuation when compared to the S&P500 average which is at 25.57.

		Industry Rank	Sector Rank
PE	12.48
Fwd PE	10.32

4.2 Price Multiples

MCY's Enterprise Value to EBITDA ratio is a bit cheaper when compared to the industry. MCY is cheaper than 66.22% of the companies in the same industry.
Compared to the rest of the industry, the Price/Free Cash Flow ratio of MCY indicates a somewhat cheap valuation: MCY is cheaper than 73.65% of the companies listed in the same industry.

		Industry Rank	Sector Rank
P/FCF	4.9
EV/EBITDA	6.7

4.3 Compensation for Growth

PEG (NY)N/A

PEG (5Y)0.55

EPS Next 2Y8.63%

EPS Next 3Y2.87%

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5. Dividend

5.1 Amount

With a Yearly Dividend Yield of 1.46%, MCY has a reasonable but not impressive dividend return.
MCY's Dividend Yield is comparable with the industry average which is at 2.23.
MCY's Dividend Yield is slightly below the S&P500 average, which is at 1.83.

		Industry Rank	Sector Rank
Dividend Yield	1.46%

5.2 History

The dividend of MCY decreases each year by -12.76%.
MCY has been paying a dividend for at least 10 years, so it has a reliable track record.
MCY has decreased its dividend recently.

Dividend Growth(5Y)-12.76%

Div Incr Years0

Div Non Decr Years1

5.3 Sustainability

16.00% of the earnings are spent on dividend by MCY. This is a low number and sustainable payout ratio.

DP16%

EPS Next 2Y8.63%

EPS Next 3Y2.87%

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MERCURY GENERAL CORP / MCY FAQ

What is the ChartMill fundamental rating of MERCURY GENERAL CORP (MCY) stock?

ChartMill assigns a fundamental rating of 5 / 10 to MCY.

Can you provide the valuation status for MERCURY GENERAL CORP?

ChartMill assigns a valuation rating of 5 / 10 to MERCURY GENERAL CORP (MCY). This can be considered as Fairly Valued.

How profitable is MERCURY GENERAL CORP (MCY) stock?

MERCURY GENERAL CORP (MCY) has a profitability rating of 5 / 10.

What is the valuation of MERCURY GENERAL CORP based on its PE and PB ratios?

The Price/Earnings (PE) ratio for MERCURY GENERAL CORP (MCY) is 12.48 and the Price/Book (PB) ratio is 2.17.

Can you provide the dividend sustainability for MCY stock?

The dividend rating of MERCURY GENERAL CORP (MCY) is 4 / 10 and the dividend payout ratio is 16%.