MERCURY GENERAL CORP (MCY) Stock Fundamental Analysis
USA - NYSE:MCY - US5894001008 - Common Stock
79.31 USD
+1.65 (+2.12%)
79.31 USD
0 (0%)
Overall MCY gets a fundamental rating of 5 out of 10. We evaluated MCY against 146 industry peers in the Insurance industry. MCY has an average financial health and profitability rating. MCY has a correct valuation and a medium growth rate.
1. Profitability
1.1 Basic Checks
In the past year MCY was profitable.
MCY had a positive operating cash flow in the past year.
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 4.29%, MCY belongs to the best of the industry, outperforming 80.82% of the companies in the same industry.
MCY has a Return On Equity of 19.81%. This is amongst the best in the industry. MCY outperforms 89.73% of its industry peers.
Looking at the Return On Invested Capital, with a value of 5.25%, MCY belongs to the top of the industry, outperforming 82.88% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 4.29% | ||
| ROE | 19.81% | ||
| ROIC | 5.25% |
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 (6.76%) which is in line with 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 8.75%, MCY is in line with its industry, outperforming 41.10% of the companies in the same industry.
MCY's Operating Margin has improved in the last couple of years.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 8.75% | ||
| PM (TTM) | 6.76% | ||
| 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
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.
The debt/assets ratio for MCY has been reduced compared to a year ago.
2.2 Solvency
MCY has an Altman-Z score of 1.41. This is a bad value and indicates that MCY is not financially healthy and even has some risk of bankruptcy.
With an excellent Altman-Z score value of 1.41, MCY belongs to the best of the industry, outperforming 82.88% of the companies in the same industry.
MCY has a debt to FCF ratio of 0.70. This is a very positive value and a sign of high solvency as it would only need 0.70 years to pay back of all of its debts.
MCY has a better Debt to FCF ratio (0.70) than 76.71% of its industry peers.
A Debt/Equity ratio of 0.29 indicates that MCY is not too dependend on debt financing.
The Debt to Equity ratio of MCY (0.29) is comparable to the rest of the industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.29 | ||
| Debt/FCF | 0.7 | ||
| Altman-Z | 1.41 |
ROIC/WACC0.64
WACC8.23%
2.3 Liquidity
MCY has a Current Ratio of 0.19. 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 0.19 is fine compared to the rest of the industry. MCY outperforms 67.12% of its industry peers.
A Quick Ratio of 0.19 indicates that MCY may have some problems paying its short term obligations.
Looking at the Quick ratio, with a value of 0.19, MCY is in the better half of the industry, outperforming 67.12% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 0.19 | ||
| Quick Ratio | 0.19 |
3. Growth
3.1 Past
The Earnings Per Share has grown by an impressive 37.02% over the past year.
Measured over the past years, MCY shows a very strong growth in Earnings Per Share. The EPS has been growing by 22.56% on average per year.
The Revenue has grown by 14.93% in the past year. This is quite good.
The Revenue has been growing slightly by 6.63% on average over the past years.
EPS 1Y (TTM)37.02%
EPS 3Y35.66%
EPS 5Y22.56%
EPS Q2Q%144.95%
Revenue 1Y (TTM)14.93%
Revenue growth 3Y11.1%
Revenue growth 5Y6.63%
Sales Q2Q%13.25%
3.2 Future
Based on estimates for the next years, MCY will show a decrease in Earnings Per Share. The EPS will decrease by -1.40% on average per year.
Based on estimates for the next years, MCY will show a small growth in Revenue. The Revenue will grow by 6.10% on average per year.
EPS Next Y-53.29%
EPS Next 2Y-3.17%
EPS Next 3Y-1.4%
EPS Next 5YN/A
Revenue Next Year5.41%
Revenue Next 2Y6.5%
Revenue Next 3Y6.1%
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.
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.
4. Valuation
4.1 Price/Earnings Ratio
Based on the Price/Earnings ratio of 13.91, the valuation of MCY can be described as correct.
The rest of the industry has a similar Price/Earnings ratio as MCY.
Compared to an average S&P500 Price/Earnings ratio of 27.41, MCY is valued a bit cheaper.
A Price/Forward Earnings ratio of 11.76 indicates a reasonable valuation of MCY.
MCY's Price/Forward Earnings is on the same level as the industry average.
MCY's Price/Forward Earnings ratio indicates a valuation a bit cheaper than the S&P500 average which is at 22.88.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 13.91 | ||
| Fwd PE | 11.76 |
4.2 Price Multiples
Compared to the rest of the industry, the Enterprise Value to EBITDA ratio of MCY indicates a somewhat cheap valuation: MCY is cheaper than 66.44% of the companies listed in the same industry.
Based on the Price/Free Cash Flow ratio, MCY is valued a bit cheaper than 71.92% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 5.37 | ||
| EV/EBITDA | 6.75 |
4.3 Compensation for Growth
MCY has a very decent profitability rating, which may justify a higher PE ratio.
PEG (NY)N/A
PEG (5Y)0.62
EPS Next 2Y-3.17%
EPS Next 3Y-1.4%
5. Dividend
5.1 Amount
With a Yearly Dividend Yield of 1.61%, MCY has a reasonable but not impressive dividend return.
Compared to an average industry Dividend Yield of 3.43, MCY has a dividend in line with its industry peers.
MCY's Dividend Yield is slightly below the S&P500 average, which is at 2.38.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 1.61% |
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.
MCY has decreased its dividend recently.
Dividend Growth(5Y)-12.76%
Div Incr Years0
Div Non Decr Years1
5.3 Sustainability
18.03% of the earnings are spent on dividend by MCY. This is a low number and sustainable payout ratio.
The Dividend Rate of MCY has been decling, while earnings will also be declining. This means the current dividend is most likely not sustainable.
DP18.03%
EPS Next 2Y-3.17%
EPS Next 3Y-1.4%
79.31
+1.65 (+2.12%)
Chartmill FA Rating
GICS SectorFinancials
GICS IndustryGroupInsurance
GICS IndustryInsurance
Earnings (Last)
Earnings (Next)
Inst Owners49.84%
Inst Owner Change-8.24%
Ins Owners35.51%
Ins Owner Change0.08%
Market Cap4.39B
Analysts80
Price Target81.6 (2.89%)
Short Float %6.17%
Short Ratio6.34
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 1.61% |
Yearly Dividend1.27
Dividend Growth(5Y)-12.76%
DP18.03%
Div Incr Years0
Div Non Decr Years1
Ex-Date
Surprises & Revisions
EPS beat(2)2
Avg EPS beat(2)45.23%
Min EPS beat(2)30.24%
Max EPS beat(2)60.22%
EPS beat(4)4
Avg EPS beat(4)71.04%
Min EPS beat(4)30.24%
Max EPS beat(4)145.76%
EPS beat(8)8
Avg EPS beat(8)249.9%
EPS beat(12)9
Avg EPS beat(12)155.98%
EPS beat(16)9
Avg EPS beat(16)61.22%
Revenue beat(2)1
Avg Revenue beat(2)-1.73%
Min Revenue beat(2)-6.45%
Max Revenue beat(2)2.99%
Revenue beat(4)2
Avg Revenue beat(4)0.97%
Min Revenue beat(4)-6.45%
Max Revenue beat(4)10.74%
Revenue beat(8)4
Avg Revenue beat(8)1.99%
Revenue beat(12)6
Avg Revenue beat(12)1.06%
Revenue beat(16)7
Avg Revenue beat(16)-1.78%
PT rev (1m)0%
PT rev (3m)0%
EPS NQ rev (1m)0%
EPS NQ rev (3m)3.75%
EPS NY rev (1m)13.68%
EPS NY rev (3m)13.68%
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 | 13.91 | ||
| Fwd PE | 11.76 | ||
| P/S | 0.76 | ||
| P/FCF | 5.37 | ||
| P/OCF | 5.05 | ||
| P/B | 2.23 | ||
| P/tB | 2.29 | ||
| EV/EBITDA | 6.75 |
EPS(TTM)5.7
EY7.19%
EPS(NY)6.74
Fwd EY8.5%
FCF(TTM)14.76
FCFY18.61%
OCF(TTM)15.69
OCFY19.79%
SpS104.14
BVpS35.56
TBVpS34.65
PEG (NY)N/A
PEG (5Y)0.62
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 4.29% | ||
| ROE | 19.81% | ||
| ROCE | 5.89% | ||
| ROIC | 5.25% | ||
| ROICexc | 6.05% | ||
| ROICexgc | 6.56% | ||
| OM | 8.75% | ||
| PM (TTM) | 6.76% | ||
| GM | N/A | ||
| FCFM | 14.17% |
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-Score7
Asset Turnover0.64
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.29 | ||
| Debt/FCF | 0.7 | ||
| Debt/EBITDA | 1.03 | ||
| Cap/Depr | 100.86% | ||
| Cap/Sales | 0.9% | ||
| Interest Coverage | 17.29 | ||
| Cash Conversion | 156.35% | ||
| Profit Quality | 209.59% | ||
| Current Ratio | 0.19 | ||
| Quick Ratio | 0.19 | ||
| Altman-Z | 1.41 |
F-Score7
WACC8.23%
ROIC/WACC0.64
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)37.02%
EPS 3Y35.66%
EPS 5Y22.56%
EPS Q2Q%144.95%
EPS Next Y-53.29%
EPS Next 2Y-3.17%
EPS Next 3Y-1.4%
EPS Next 5YN/A
Revenue 1Y (TTM)14.93%
Revenue growth 3Y11.1%
Revenue growth 5Y6.63%
Sales Q2Q%13.25%
Revenue Next Year5.41%
Revenue Next 2Y6.5%
Revenue Next 3Y6.1%
Revenue Next 5YN/A
EBIT growth 1Y21.22%
EBIT growth 3Y24.17%
EBIT growth 5Y8.92%
EBIT Next YearN/A
EBIT Next 3YN/A
EBIT Next 5YN/A
FCF growth 1Y262.38%
FCF growth 3Y29.13%
FCF growth 5Y15.62%
OCF growth 1Y230.42%
OCF growth 3Y27.4%
OCF growth 5Y14.82%