MERCURY GENERAL CORP (MCY) Stock Fundamental Analysis
USA - NYSE:MCY - US5894001008 - Common Stock
79.51 USD
+0.2 (+0.25%)
79.511 USD
0 (0%)
We assign a fundamental rating of 5 out of 10 to MCY. MCY was compared to 146 industry peers in the Insurance industry. MCY has an average financial health and profitability rating. MCY is not valued too expensively and it also shows a decent growth rate.
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
The Return On Assets of MCY (4.29%) is better than 80.82% of its industry peers.
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.
In the last couple of years the Profit Margin of MCY has remained more or less at the same level.
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.
Compared to 1 year ago, MCY has about the same amount of shares outstanding.
Compared to 5 years ago, MCY has about the same amount of shares outstanding.
Compared to 1 year ago, MCY has an improved debt to assets ratio.
2.2 Solvency
Based on the Altman-Z score of 1.42, we must say that MCY is in the distress zone and has some risk of bankruptcy.
MCY's Altman-Z score of 1.42 is amongst the best of the industry. MCY outperforms 82.88% of its industry peers.
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.
With a decent Debt to FCF ratio value of 0.70, MCY is doing good in the industry, outperforming 76.71% of the companies in the same industry.
A Debt/Equity ratio of 0.29 indicates that MCY is not too dependend on debt financing.
With a Debt to Equity ratio value of 0.29, MCY perfoms like the industry average, outperforming 54.79% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.29 | ||
| Debt/FCF | 0.7 | ||
| Altman-Z | 1.42 |
ROIC/WACC0.63
WACC8.3%
2.3 Liquidity
A Current Ratio of 0.19 indicates that MCY may have some problems paying its short term obligations.
Looking at the Current 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.
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
MCY shows a strong growth in Earnings Per Share. In the last year, the EPS has been growing by 37.02%, 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
MCY shows quite a strong growth in Revenue. In the last year, the Revenue has grown by 14.93%.
MCY shows a small growth in Revenue. Measured over the last years, the Revenue has been growing by 6.63% yearly.
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
The Earnings Per Share is expected to decrease by -1.40% on average over the next years.
The Revenue is expected to grow by 6.10% on average over the next years.
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
A Price/Earnings ratio of 13.95 indicates a correct valuation of MCY.
Compared to the rest of the industry, the Price/Earnings ratio of MCY is on the same level as its industry peers.
The average S&P500 Price/Earnings ratio is at 27.38. MCY is valued slightly cheaper when compared to this.
A Price/Forward Earnings ratio of 11.79 indicates a reasonable valuation of MCY.
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 22.86, MCY is valued a bit cheaper.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 13.95 | ||
| Fwd PE | 11.79 |
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 65.75% of the companies listed in the same industry.
Based on the Price/Free Cash Flow ratio, MCY is valued a bit cheaper than the industry average as 71.23% of the companies are valued more expensively.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 5.39 | ||
| EV/EBITDA | 6.92 |
4.3 Compensation for Growth
The decent profitability rating of MCY 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
MCY has a Yearly Dividend Yield of 1.60%.
Compared to an average industry Dividend Yield of 3.44, 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 | 1.6% |
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
MCY pays out 18.03% of its income as dividend. This is a 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%
79.51
+0.2 (+0.25%)
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 Cap4.40B
Analysts80
Price Target81.6 (2.63%)
Short Float %6.17%
Short Ratio6.34
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 1.6% |
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 | 13.95 | ||
| Fwd PE | 11.79 | ||
| P/S | 0.76 | ||
| P/FCF | 5.39 | ||
| P/OCF | 5.07 | ||
| P/B | 2.24 | ||
| P/tB | 2.29 | ||
| EV/EBITDA | 6.92 |
EPS(TTM)5.7
EY7.17%
EPS(NY)6.74
Fwd EY8.48%
FCF(TTM)14.76
FCFY18.56%
OCF(TTM)15.69
OCFY19.74%
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 | 1.42 |
F-Score7
WACC8.3%
ROIC/WACC0.63
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%