MERCURY GENERAL CORP (MCY) Stock Fundamental Analysis
NYSE:MCY - New York Stock Exchange, Inc. - US5894001008 - Common Stock - Currency: USD
We assign a fundamental rating of 5 out of 10 to MCY. MCY was compared to 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.
In the past 5 years MCY always reported a positive cash flow from operatings.
1.2 Ratios
The Return On Assets of MCY (3.17%) is better than 72.73% of its industry peers.
MCY has a Return On Equity of 15.72%. This is in the better half of the industry: MCY outperforms 76.92% of its industry peers.
MCY's Return On Invested Capital of 3.77% is fine compared to the rest of the industry. MCY outperforms 73.43% 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
MCY has a Profit Margin of 5.11%. This is in the lower half of the industry: MCY underperforms 62.24% of its industry peers.
MCY's Profit Margin has been stable in the last couple of years.
MCY's Operating Margin of 6.68% is on the low side compared to the rest of the industry. MCY is outperformed by 62.94% 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
MCY has a Return on Invested Capital (ROIC), which is below the Cost of Capital (WACC), which means it is destroying value.
The number of shares outstanding for MCY remains at a similar level compared to 1 year ago.
Compared to 5 years ago, MCY has about the same amount of shares outstanding.
MCY has a better debt/assets ratio than last year.
2.2 Solvency
MCY has an Altman-Z score of 1.30. This is a bad value and indicates that MCY is not financially healthy and even has some risk of bankruptcy.
Looking at the Altman-Z score, with a value of 1.30, MCY belongs to the top of the industry, outperforming 83.22% of the companies in the same industry.
The Debt to FCF ratio of MCY is 0.79, which is an excellent value as it means it would take MCY, only 0.79 years of fcf income to pay off all of its debts.
Looking at the Debt to FCF ratio, with a value of 0.79, MCY is in the better half of the industry, outperforming 69.93% of the companies in the same industry.
A Debt/Equity ratio of 0.32 indicates that MCY is not too dependend on debt financing.
MCY has a Debt to Equity ratio (0.32) which is in line with its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.32 | ||
| Debt/FCF | 0.79 | ||
| Altman-Z | 1.3 |
ROIC/WACC0.44
WACC8.5%
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 76.92% of its industry peers.
A Quick Ratio of 0.80 indicates that MCY may have some problems paying its short term obligations.
MCY's Quick ratio of 0.80 is fine compared to the rest of the industry. MCY outperforms 76.92% of its industry peers.
| 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.
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.
MCY shows quite a strong growth in Revenue. In the last year, the Revenue has grown by 16.64%.
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
MCY is expected to show a small growth in Earnings Per Share. In the coming years, the EPS will grow by 0.15% yearly.
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
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
MCY is valuated correctly with a Price/Earnings ratio of 15.00.
The rest of the industry has a similar Price/Earnings ratio as MCY.
Compared to an average S&P500 Price/Earnings ratio of 26.35, MCY is valued a bit cheaper.
With a Price/Forward Earnings ratio of 9.17, the valuation of MCY can be described as very reasonable.
MCY's Price/Forward Earnings is on the same level as the industry average.
Compared to an average S&P500 Price/Forward Earnings ratio of 22.20, MCY is valued rather cheaply.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 15 | ||
| Fwd PE | 9.17 |
4.2 Price Multiples
Based on the Enterprise Value to EBITDA ratio, MCY is valued a bit cheaper than 71.33% of the companies in the same industry.
Based on the Price/Free Cash Flow ratio, MCY is valued a bit cheaper than the industry average as 69.93% of the companies are valued more expensively.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 4.71 | ||
| EV/EBITDA | 6.48 |
4.3 Compensation for Growth
PEG (NY)N/A
PEG (5Y)0.66
EPS Next 2Y-3.17%
EPS Next 3Y0.15%
5. Dividend
5.1 Amount
With a Yearly Dividend Yield of 2.10%, MCY has a reasonable but not impressive dividend return.
MCY's Dividend Yield is comparable with the industry average which is at 3.23.
Compared to an average S&P500 Dividend Yield of 2.40, MCY has a dividend comparable with the average S&P500 company.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 2.1% |
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
24.58% of the earnings are spent on dividend by MCY. This is a low number and sustainable payout ratio.
DP24.58%
EPS Next 2Y-3.17%
EPS Next 3Y0.15%
61.8
+2.03 (+3.4%)
Chartmill FA Rating
GICS SectorFinancials
GICS IndustryGroupInsurance
GICS IndustryInsurance
Earnings (Last)
Earnings (Next)
Inst Owners44.4%
Inst Owner Change10.33%
Ins Owners35.51%
Ins Owner Change0%
Market Cap3.42B
Analysts80
Price Target81.6 (32.04%)
Short Float %6.53%
Short Ratio4
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 2.1% |
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)1750%
EPS NQ rev (3m)50%
EPS NY rev (1m)101.72%
EPS NY rev (3m)101.72%
Revenue NQ rev (1m)-1.98%
Revenue NQ rev (3m)0.63%
Revenue NY rev (1m)-1.87%
Revenue NY rev (3m)-1.87%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 15 | ||
| Fwd PE | 9.17 | ||
| P/S | 0.61 | ||
| P/FCF | 4.71 | ||
| P/OCF | 4.41 | ||
| P/B | 1.88 | ||
| P/tB | 1.93 | ||
| EV/EBITDA | 6.48 |
EPS(TTM)4.12
EY6.67%
EPS(NY)6.74
Fwd EY10.91%
FCF(TTM)13.12
FCFY21.23%
OCF(TTM)14.01
OCFY22.66%
SpS101.02
BVpS32.87
TBVpS31.96
PEG (NY)N/A
PEG (5Y)0.66
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 | 1.3 |
F-Score7
WACC8.5%
ROIC/WACC0.44
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%