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 144 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 has a decent growth rate and is not valued too expensively.
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.
Of the past 5 years MCY 4 years were profitable.
In the past 5 years MCY always reported a positive cash flow from operatings.
1.2 Ratios
MCY's Return On Assets of 3.17% is fine compared to the rest of the industry. MCY outperforms 72.22% of its industry peers.
MCY has a better Return On Equity (15.72%) than 75.69% of its industry peers.
MCY has a better Return On Invested Capital (3.77%) than 73.61% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 3.17% | ||
| ROE | 15.72% | ||
| ROIC | 3.77% |
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
The Profit Margin of MCY (5.11%) is worse than 61.11% of its industry peers.
In the last couple of years the Profit Margin of MCY has remained more or less at the same level.
MCY has a worse Operating Margin (6.68%) than 65.28% of its industry peers.
MCY's Operating Margin has improved in the last couple of years.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 6.68% | ||
| PM (TTM) | 5.11% | ||
| 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.
The number of shares outstanding for MCY remains at a similar level compared to 1 year ago.
The number of shares outstanding for MCY remains at a similar level compared to 5 years ago.
MCY has a better debt/assets ratio than last year.
2.2 Solvency
Based on the Altman-Z score of 1.33, we must say that MCY is in the distress zone and has some risk of bankruptcy.
With an excellent Altman-Z score value of 1.33, MCY belongs to the best of the industry, outperforming 82.64% of the companies in the same industry.
MCY has a debt to FCF ratio of 0.79. This is a very positive value and a sign of high solvency as it would only need 0.79 years to pay back of all of its debts.
MCY has a Debt to FCF ratio of 0.79. This is in the better half of the industry: MCY outperforms 71.53% of its industry peers.
MCY has a Debt/Equity ratio of 0.32. This is a healthy value indicating a solid balance between debt and equity.
MCY has a Debt to Equity ratio (0.32) which is comparable to the rest of the industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.32 | ||
| Debt/FCF | 0.79 | ||
| Altman-Z | 1.33 |
ROIC/WACC0.4
WACC9.45%
2.3 Liquidity
A Current Ratio of 0.80 indicates that MCY may have some problems paying its short term obligations.
MCY has a Current ratio of 0.80. This is in the better half of the industry: MCY outperforms 78.47% of its industry peers.
A Quick Ratio of 0.80 indicates that MCY may have some problems paying its short term obligations.
Looking at the Quick ratio, with a value of 0.80, MCY is in the better half of the industry, outperforming 78.47% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 0.8 | ||
| Quick Ratio | 0.8 |
3. Growth
3.1 Past
MCY shows a strong growth in Earnings Per Share. In the last year, the EPS has been growing by 58.46%, which is quite impressive.
The Earnings Per Share has been growing by 22.56% on average over the past years. This is a very strong growth
The Revenue has grown by 16.64% 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)58.46%
EPS 3Y35.66%
EPS 5Y22.56%
EPS Q2Q%-393.59%
Revenue 1Y (TTM)16.64%
Revenue growth 3Y11.1%
Revenue growth 5Y6.63%
Sales Q2Q%9.4%
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 0.15% on average per year.
The Revenue is expected to grow by 6.10% on average over the next years.
EPS Next Y-58.91%
EPS Next 2Y-3.17%
EPS Next 3Y0.15%
EPS Next 5YN/A
Revenue Next Year5.41%
Revenue Next 2Y6.5%
Revenue Next 3Y6.1%
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.
4. Valuation
4.1 Price/Earnings Ratio
Based on the Price/Earnings ratio of 16.26, the valuation of MCY can be described as correct.
MCY's Price/Earnings is on the same level as the industry average.
MCY is valuated rather cheaply when we compare the Price/Earnings ratio to 27.21, which is the current average of the S&P500 Index.
With a Price/Forward Earnings ratio of 9.94, the valuation of MCY can be described as very reasonable.
MCY's Price/Forward Earnings ratio is in line with the industry average.
When comparing the Price/Forward Earnings ratio of MCY to the average of the S&P500 Index (21.70), we can say MCY is valued rather cheaply.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 16.26 | ||
| Fwd PE | 9.94 |
4.2 Price Multiples
66.67% of the companies in the same industry are more expensive than MCY, based on the Enterprise Value to EBITDA ratio.
69.44% 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 | 5.11 | ||
| EV/EBITDA | 7.22 |
4.3 Compensation for Growth
PEG (NY)N/A
PEG (5Y)0.72
EPS Next 2Y-3.17%
EPS Next 3Y0.15%
5. Dividend
5.1 Amount
MCY has a Yearly Dividend Yield of 1.94%.
MCY's Dividend Yield is comparable with the industry average which is at 3.51.
MCY's Dividend Yield is comparable with the S&P500 average which is at 2.42.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 1.94% |
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
MCY pays out 24.58% of its income as dividend. This is a sustainable payout ratio.
DP24.58%
EPS Next 2Y-3.17%
EPS Next 3Y0.15%
67.01
-0.33 (-0.49%)
Chartmill FA Rating
GICS SectorFinancials
GICS IndustryGroupInsurance
GICS IndustryInsurance
Earnings (Last)
Earnings (Next)
Inst Owners51.81%
Inst Owner Change10.22%
Ins Owners35.51%
Ins Owner Change0.08%
Market Cap3.71B
Analysts80
Price Target81.6 (21.77%)
Short Float %5.71%
Short Ratio4.67
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 1.94% |
Yearly Dividend1.27
Dividend Growth(5Y)-12.76%
DP24.58%
Div Incr Years0
Div Non Decr Years1
Ex-Date
Surprises & Revisions
EPS beat(2)2
Avg EPS beat(2)88%
Min EPS beat(2)30.24%
Max EPS beat(2)145.76%
EPS beat(4)4
Avg EPS beat(4)64.71%
Min EPS beat(4)30.24%
Max EPS beat(4)145.76%
EPS beat(8)7
Avg EPS beat(8)241.65%
EPS beat(12)8
Avg EPS beat(12)108.66%
EPS beat(16)8
Avg EPS beat(16)57.16%
Revenue beat(2)0
Avg Revenue beat(2)-4.92%
Min Revenue beat(2)-6.45%
Max Revenue beat(2)-3.38%
Revenue beat(4)1
Avg Revenue beat(4)-0.43%
Min Revenue beat(4)-6.45%
Max Revenue beat(4)10.74%
Revenue beat(8)3
Avg Revenue beat(8)1.58%
Revenue beat(12)5
Avg Revenue beat(12)-1.16%
Revenue beat(16)7
Avg Revenue beat(16)-1.5%
PT rev (1m)0%
PT rev (3m)0%
EPS NQ rev (1m)0%
EPS NQ rev (3m)1750%
EPS NY rev (1m)0%
EPS NY rev (3m)101.72%
Revenue NQ rev (1m)0%
Revenue NQ rev (3m)-1.98%
Revenue NY rev (1m)0%
Revenue NY rev (3m)-1.87%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 16.26 | ||
| Fwd PE | 9.94 | ||
| P/S | 0.66 | ||
| P/FCF | 5.11 | ||
| P/OCF | 4.78 | ||
| P/B | 2.04 | ||
| P/tB | 2.1 | ||
| EV/EBITDA | 7.22 |
EPS(TTM)4.12
EY6.15%
EPS(NY)6.74
Fwd EY10.06%
FCF(TTM)13.12
FCFY19.58%
OCF(TTM)14.01
OCFY20.9%
SpS101.02
BVpS32.87
TBVpS31.96
PEG (NY)N/A
PEG (5Y)0.72
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 3.17% | ||
| ROE | 15.72% | ||
| ROCE | 4.23% | ||
| ROIC | 3.77% | ||
| ROICexc | 4.41% | ||
| ROICexgc | 5.01% | ||
| OM | 6.68% | ||
| PM (TTM) | 5.11% | ||
| GM | N/A | ||
| FCFM | 12.99% |
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 Turnover0.62
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.32 | ||
| Debt/FCF | 0.79 | ||
| Debt/EBITDA | 1.37 | ||
| Cap/Depr | 109.38% | ||
| Cap/Sales | 0.88% | ||
| Interest Coverage | 12.66 | ||
| Cash Conversion | 185.41% | ||
| Profit Quality | 253.96% | ||
| Current Ratio | 0.8 | ||
| Quick Ratio | 0.8 | ||
| Altman-Z | 1.33 |
F-Score7
WACC9.45%
ROIC/WACC0.4
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)58.46%
EPS 3Y35.66%
EPS 5Y22.56%
EPS Q2Q%-393.59%
EPS Next Y-58.91%
EPS Next 2Y-3.17%
EPS Next 3Y0.15%
EPS Next 5YN/A
Revenue 1Y (TTM)16.64%
Revenue growth 3Y11.1%
Revenue growth 5Y6.63%
Sales Q2Q%9.4%
Revenue Next Year5.41%
Revenue Next 2Y6.5%
Revenue Next 3Y6.1%
Revenue Next 5YN/A
EBIT growth 1Y34.53%
EBIT growth 3Y24.17%
EBIT growth 5Y8.92%
EBIT Next YearN/A
EBIT Next 3YN/A
EBIT Next 5YN/A
FCF growth 1Y218.33%
FCF growth 3Y29.13%
FCF growth 5Y15.62%
OCF growth 1Y193.63%
OCF growth 3Y27.4%
OCF growth 5Y14.82%