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. MCY has only an average score on both its financial health and profitability. MCY has a correct valuation and a medium 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
MCY has a better Return On Assets (3.17%) than 72.22% of its industry peers.
MCY has a better Return On Equity (15.72%) than 75.69% of its industry peers.
Looking at the Return On Invested Capital, with a value of 3.77%, MCY is in the better half of the industry, outperforming 73.61% of the companies in the same industry.
| 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 61.11% of its industry peers.
MCY's Profit Margin has been stable in the last couple of years.
With a Operating Margin value of 6.68%, MCY is not doing good in the industry: 65.28% of the companies in the same industry are doing better.
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
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 1.33. This is a bad value and indicates that MCY is not financially healthy and even has some risk of bankruptcy.
MCY's Altman-Z score of 1.33 is amongst the best of the industry. MCY outperforms 82.64% of its industry peers.
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's Debt to FCF ratio of 0.79 is fine compared to the rest of the industry. MCY outperforms 71.53% of its industry peers.
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 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
MCY has a Current Ratio of 0.80. This is a bad value and indicates that MCY is not financially healthy enough and could expect problems in meeting its short term obligations.
With a decent Current ratio value of 0.80, MCY is doing good in the industry, outperforming 78.47% of the companies in the same industry.
MCY has a Quick Ratio of 0.80. 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 (0.80) than 78.47% 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%.
MCY shows a small growth in Revenue. Measured over the last years, the Revenue has been growing by 6.63% yearly.
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 16.34.
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 27.45, which is the current average of the S&P500 Index.
MCY is valuated reasonably with a Price/Forward Earnings ratio of 9.98.
The rest of the industry has a similar Price/Forward Earnings ratio as MCY.
MCY is valuated cheaply when we compare the Price/Forward Earnings ratio to 21.90, which is the current average of the S&P500 Index.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 16.34 | ||
| Fwd PE | 9.98 |
4.2 Price Multiples
MCY's Enterprise Value to EBITDA ratio is a bit cheaper when compared to the industry. MCY is cheaper than 68.06% 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 69.44% of the companies are valued more expensively.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 5.13 | ||
| EV/EBITDA | 7.21 |
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%.
Compared to an average industry Dividend Yield of 3.51, MCY has a dividend in line with its industry peers.
Compared to an average S&P500 Dividend Yield of 2.42, MCY has a dividend comparable with the average S&P500 company.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 1.94% |
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.
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%
67.31
+1.49 (+2.26%)
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 Cap3.73B
Analysts80
Price Target81.6 (21.23%)
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 | 16.34 | ||
| Fwd PE | 9.98 | ||
| P/S | 0.67 | ||
| P/FCF | 5.13 | ||
| P/OCF | 4.81 | ||
| P/B | 2.05 | ||
| P/tB | 2.11 | ||
| EV/EBITDA | 7.21 |
EPS(TTM)4.12
EY6.12%
EPS(NY)6.74
Fwd EY10.02%
FCF(TTM)13.12
FCFY19.49%
OCF(TTM)14.01
OCFY20.81%
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%