MERCURY GENERAL CORP (MCY) Stock Fundamental Analysis
NYSE:MCY - New York Stock Exchange, Inc. - US5894001008 - Common Stock
MCY gets a fundamental rating of 6 out of 10. The analysis compared the fundamentals against 143 industry peers in the Insurance industry. MCY has only an average score on both its financial health and profitability. MCY is growing strongly while it also seems undervalued. This is an interesting combination
1. Profitability
1.1 Basic Checks
MCY had positive earnings in the past year.
In the past year MCY had a positive cash flow from operations.
Of the past 5 years MCY 4 years were profitable.
MCY had a positive operating cash flow in each of the past 5 years.
1.2 Ratios
Looking at the Return On Assets, with a value of 6.85%, MCY belongs to the top of the industry, outperforming 86.52% of the companies in the same industry.
MCY's Return On Equity of 29.98% is amongst the best of the industry. MCY outperforms 92.91% of its industry peers.
MCY has a Return On Invested Capital of 7.22%. This is amongst the best in the industry. MCY outperforms 87.23% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 6.85% | ||
| ROE | 29.98% | ||
| ROIC | 7.22% |
ROA(3y)-0.95%
ROA(5y)1.7%
ROE(3y)-5.29%
ROE(5y)4.07%
ROIC(3y)N/A
ROIC(5y)N/A
1.3 Margins
MCY's Profit Margin of 10.18% is fine compared to the rest of the industry. MCY outperforms 60.28% of its industry peers.
MCY's Profit Margin has declined in the last couple of years.
Looking at the Operating Margin, with a value of 13.14%, MCY is in line with its industry, outperforming 54.61% of the companies in the same industry.
MCY's Operating Margin has declined in the last couple of years.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 13.14% | ||
| PM (TTM) | 10.18% | ||
| GM | N/A |
OM growth 3Y-40.33%
OM growth 5YN/A
PM growth 3Y-40.54%
PM growth 5YN/A
GM growth 3YN/A
GM growth 5YN/A
2. Health
2.1 Basic Checks
The Return on Invested Capital (ROIC) is below the Cost of Capital (WACC), so MCY is destroying value.
MCY has about the same amout of shares outstanding than it did 1 year ago.
The number of shares outstanding for MCY remains at a similar level compared to 5 years ago.
Compared to 1 year ago, MCY has a worse debt to assets ratio.
2.2 Solvency
MCY has an Altman-Z score of 1.50. 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 1.50. This is amongst the best in the industry. MCY outperforms 83.69% of its industry peers.
MCY has a debt to FCF ratio of 0.59. This is a very positive value and a sign of high solvency as it would only need 0.59 years to pay back of all of its debts.
Looking at the Debt to FCF ratio, with a value of 0.59, MCY is in the better half of the industry, outperforming 75.89% of the companies in the same industry.
A Debt/Equity ratio of 0.31 indicates that MCY is not too dependend on debt financing.
MCY's Debt to Equity ratio of 0.31 is in line compared to the rest of the industry. MCY outperforms 53.19% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.31 | ||
| Debt/FCF | 0.59 | ||
| Altman-Z | 1.5 |
ROIC/WACC0.86
WACC8.42%
2.3 Liquidity
A Current Ratio of 0.21 indicates that MCY may have some problems paying its short term obligations.
Looking at the Current ratio, with a value of 0.21, MCY is in the better half of the industry, outperforming 69.50% of the companies in the same industry.
MCY has a Quick Ratio of 0.21. 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 has a better Quick ratio (0.21) than 69.50% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 0.21 | ||
| Quick Ratio | 0.21 |
3. Growth
3.1 Past
The Earnings Per Share has grown by an impressive 341.74% over the past year.
Measured over the past years, MCY shows a very negative growth in Earnings Per Share. The EPS has been decreasing by -30.12% on average per year.
The Revenue has grown by 24.45% in the past year. This is a very strong growth!
MCY shows a small growth in Revenue. Measured over the last years, the Revenue has been growing by 6.49% yearly.
EPS 1Y (TTM)341.74%
EPS 3Y-62.17%
EPS 5Y-30.12%
EPS Q2Q%122.81%
Revenue 1Y (TTM)24.45%
Revenue growth 3Y6.95%
Revenue growth 5Y6.49%
Sales Q2Q%43.67%
3.2 Future
Based on estimates for the next years, MCY will show a very strong growth in Earnings Per Share. The EPS will grow by 186.70% on average per year.
Based on estimates for the next years, MCY will show a quite strong growth in Revenue. The Revenue will grow by 11.44% on average per year.
EPS Next Y1978.92%
EPS Next 2Y383.72%
EPS Next 3Y186.7%
EPS Next 5YN/A
Revenue Next Year24.78%
Revenue Next 2Y15.06%
Revenue Next 3Y11.44%
Revenue Next 5YN/A
3.3 Evolution
The EPS growth rate is accelerating: in the next years the growth will be better than in the last years.
The Revenue growth rate is accelerating: in the next years the growth will be better than in the last years.
4. Valuation
4.1 Price/Earnings Ratio
MCY is valuated reasonably with a Price/Earnings ratio of 9.01.
MCY's Price/Earnings ratio is a bit cheaper when compared to the industry. MCY is cheaper than 70.92% of the companies in the same industry.
MCY's Price/Earnings ratio indicates a rather cheap valuation when compared to the S&P500 average which is at 28.29.
A Price/Forward Earnings ratio of 7.14 indicates a rather cheap valuation of MCY.
Based on the Price/Forward Earnings ratio, MCY is valued a bit cheaper than 78.01% of the companies in the same industry.
MCY's Price/Forward Earnings ratio indicates a rather cheap valuation when compared to the S&P500 average which is at 24.44.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 9.01 | ||
| Fwd PE | 7.14 |
4.2 Price Multiples
Compared to the rest of the industry, the Enterprise Value to EBITDA ratio of MCY indicates a rather cheap valuation: MCY is cheaper than 85.82% of the companies listed in the same industry.
80.85% 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 | 2.86 | ||
| EV/EBITDA | 3.65 |
4.3 Compensation for Growth
MCY's low PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates a rather cheap valuation of the company.
A more expensive valuation may be justified as MCY's earnings are expected to grow with 186.70% in the coming years.
PEG (NY)0
PEG (5Y)N/A
EPS Next 2Y383.72%
EPS Next 3Y186.7%
5. Dividend
5.1 Amount
With a Yearly Dividend Yield of 2.44%, MCY has a reasonable but not impressive dividend return.
The stock price of MCY dropped by -25.28% in the last 3 months. With lower prices the dividend yield is higher, but it may be a sign investors do not trust the long term dividend.
Compared to an average industry Dividend Yield of 2.99, MCY pays a bit more dividend than its industry peers.
Compared to an average S&P500 Dividend Yield of 2.28, MCY has a dividend comparable with the average S&P500 company.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 2.44% |
5.2 History
The dividend of MCY decreases each year by -12.70%.
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)-12.7%
Div Incr Years0
Div Non Decr Years1
5.3 Sustainability
MCY pays out 12.60% of its income as dividend. This is a sustainable payout ratio.
DP12.6%
EPS Next 2Y383.72%
EPS Next 3Y186.7%
MERCURY GENERAL CORP
NYSE:MCY (1/21/2025, 8:13:29 PM)
After market: 50.08 -0.01 (-0.02%)50.09
+1.9 (+3.94%)
Chartmill FA Rating
GICS SectorFinancials
GICS IndustryGroupInsurance
GICS IndustryInsurance
Earnings (Last)
Earnings (Next)
Inst Owners43.78%
Inst Owner Change-0.83%
Ins Owners35.5%
Ins Owner Change-0.01%
Market Cap2.77B
Analysts76.67
Price Target81.6 (62.91%)
Short Float %3.63%
Short Ratio2.4
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 2.44% |
Yearly Dividend1.27
Dividend Growth(5Y)-12.7%
DP12.6%
Div Incr Years0
Div Non Decr Years1
Ex-DateN/A
Surprises & Revisions
EPS beat(2)2
Avg EPS beat(2)41.42%
Min EPS beat(2)34.9%
Max EPS beat(2)47.93%
EPS beat(4)4
Avg EPS beat(4)271.14%
Min EPS beat(4)34.9%
Max EPS beat(4)517.82%
EPS beat(8)5
Avg EPS beat(8)178.08%
EPS beat(12)6
Avg EPS beat(12)63.67%
EPS beat(16)8
Avg EPS beat(16)52.8%
Revenue beat(2)1
Avg Revenue beat(2)4.06%
Min Revenue beat(2)-2.61%
Max Revenue beat(2)10.74%
Revenue beat(4)3
Avg Revenue beat(4)6.88%
Min Revenue beat(4)-2.61%
Max Revenue beat(4)17.29%
Revenue beat(8)5
Avg Revenue beat(8)4.33%
Revenue beat(12)6
Avg Revenue beat(12)-1.64%
Revenue beat(16)9
Avg Revenue beat(16)0.32%
PT rev (1m)0%
PT rev (3m)0%
EPS NQ rev (1m)0%
EPS NQ rev (3m)115.85%
EPS NY rev (1m)0%
EPS NY rev (3m)23.5%
Revenue NQ rev (1m)0%
Revenue NQ rev (3m)-1.53%
Revenue NY rev (1m)0%
Revenue NY rev (3m)3%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 9.01 | ||
| Fwd PE | 7.14 | ||
| P/S | 0.51 | ||
| P/FCF | 2.86 | ||
| P/OCF | 2.73 | ||
| P/B | 1.49 | ||
| P/tB | 1.53 | ||
| EV/EBITDA | 3.65 |
EPS(TTM)5.56
EY11.1%
EPS(NY)7.02
Fwd EY14.01%
FCF(TTM)17.53
FCFY34.99%
OCF(TTM)18.31
OCFY36.56%
SpS99.04
BVpS33.63
TBVpS32.72
PEG (NY)0
PEG (5Y)N/A
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 6.85% | ||
| ROE | 29.98% | ||
| ROCE | 9.14% | ||
| ROIC | 7.22% | ||
| ROICexc | 7.83% | ||
| ROICexgc | 8.08% | ||
| OM | 13.14% | ||
| PM (TTM) | 10.18% | ||
| GM | N/A | ||
| FCFM | 17.7% |
ROA(3y)-0.95%
ROA(5y)1.7%
ROE(3y)-5.29%
ROE(5y)4.07%
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 3Y-38.37%
ROICexcg growth 5YN/A
ROICexc growth 3Y-38.37%
ROICexc growth 5YN/A
OM growth 3Y-40.33%
OM growth 5YN/A
PM growth 3Y-40.54%
PM growth 5YN/A
GM growth 3YN/A
GM growth 5YN/A
F-Score8
Asset Turnover0.67
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.31 | ||
| Debt/FCF | 0.59 | ||
| Debt/EBITDA | 0.77 | ||
| Cap/Depr | 161.25% | ||
| Cap/Sales | 0.8% | ||
| Interest Coverage | 23.79 | ||
| Cash Conversion | 135.68% | ||
| Profit Quality | 173.83% | ||
| Current Ratio | 0.21 | ||
| Quick Ratio | 0.21 | ||
| Altman-Z | 1.5 |
F-Score8
WACC8.42%
ROIC/WACC0.86
Cap/Depr(3y)63.65%
Cap/Depr(5y)69.99%
Cap/Sales(3y)0.94%
Cap/Sales(5y)0.97%
Profit Quality(3y)N/A
Profit Quality(5y)N/A
High Growth Momentum
Growth
EPS 1Y (TTM)341.74%
EPS 3Y-62.17%
EPS 5Y-30.12%
EPS Q2Q%122.81%
EPS Next Y1978.92%
EPS Next 2Y383.72%
EPS Next 3Y186.7%
EPS Next 5YN/A
Revenue 1Y (TTM)24.45%
Revenue growth 3Y6.95%
Revenue growth 5Y6.49%
Sales Q2Q%43.67%
Revenue Next Year24.78%
Revenue Next 2Y15.06%
Revenue Next 3Y11.44%
Revenue Next 5YN/A
EBIT growth 1Y633.62%
EBIT growth 3Y-36.18%
EBIT growth 5YN/A
EBIT Next YearN/A
EBIT Next 3YN/A
EBIT Next 5YN/A
FCF growth 1Y202.33%
FCF growth 3Y-9.72%
FCF growth 5Y3.21%
OCF growth 1Y182.87%
OCF growth 3Y-9.22%
OCF growth 5Y3.39%