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. MCY has only an average score on both its financial health and profitability. MCY has a decent growth rate and is not valued too expensively.
1. Profitability
1.1 Basic Checks
In the past year MCY was profitable.
MCY had a positive operating cash flow in the past year.
MCY had positive earnings in 4 of the past 5 years.
In the past 5 years MCY always reported a positive cash flow from operatings.
1.2 Ratios
With an excellent Return On Assets value of 5.63%, MCY belongs to the best of the industry, outperforming 87.41% of the companies in the same industry.
Looking at the Return On Equity, with a value of 24.04%, MCY belongs to the top of the industry, outperforming 91.61% of the companies in the same industry.
Looking at the Return On Invested Capital, with a value of 6.72%, MCY belongs to the top of the industry, outperforming 87.41% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 5.63% | ||
| ROE | 24.04% | ||
| ROIC | 6.72% |
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
With a Profit Margin value of 8.55%, MCY perfoms like the industry average, outperforming 55.24% of the companies in the same industry.
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 11.06%, MCY is in line with its industry, outperforming 49.65% of the companies in the same industry.
In the last couple of years the Operating Margin of MCY has grown nicely.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 11.06% | ||
| PM (TTM) | 8.55% | ||
| 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.
MCY has about the same amout of shares outstanding than it did 5 years ago.
MCY has a better debt/assets ratio than last year.
2.2 Solvency
Based on the Altman-Z score of 1.46, we must say that MCY is in the distress zone and has some risk of bankruptcy.
MCY has a Altman-Z score of 1.46. This is amongst the best in the industry. MCY outperforms 83.92% of its industry peers.
MCY has a debt to FCF ratio of 0.58. This is a very positive value and a sign of high solvency as it would only need 0.58 years to pay back of all of its debts.
With a decent Debt to FCF ratio value of 0.58, MCY is doing good in the industry, outperforming 74.83% of the companies in the same industry.
MCY has a Debt/Equity ratio of 0.29. This is a healthy value indicating a solid balance between debt and equity.
MCY has a Debt to Equity ratio (0.29) which is in line with its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.29 | ||
| Debt/FCF | 0.58 | ||
| Altman-Z | 1.46 |
ROIC/WACC0.81
WACC8.25%
2.3 Liquidity
A Current Ratio of 0.22 indicates that MCY may have some problems paying its short term obligations.
With a decent Current ratio value of 0.22, MCY is doing good in the industry, outperforming 69.23% of the companies in the same industry.
MCY has a Quick Ratio of 0.22. This is a bad value and indicates that MCY is not financially healthy enough and could expect problems in meeting its short term obligations.
Looking at the Quick ratio, with a value of 0.22, MCY is in the better half of the industry, outperforming 69.23% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 0.22 | ||
| Quick Ratio | 0.22 |
3. Growth
3.1 Past
The Earnings Per Share has grown by an impressive 2296.67% over the past year.
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 18.27%.
Measured over the past years, MCY shows a small growth in Revenue. The Revenue has been growing by 6.63% on average per year.
EPS 1Y (TTM)2296.67%
EPS 3Y35.66%
EPS 5Y22.56%
EPS Q2Q%141.74%
Revenue 1Y (TTM)18.27%
Revenue growth 3Y11.1%
Revenue growth 5Y6.63%
Sales Q2Q%-0.62%
3.2 Future
The Earnings Per Share is expected to decrease by -9.16% on average over the next years.
The Revenue is expected to grow by 7.27% on average over the next years.
EPS Next Y-79.63%
EPS Next 2Y-9.16%
EPS Next 3YN/A
EPS Next 5YN/A
Revenue Next Year7.42%
Revenue Next 2Y7.27%
Revenue Next 3YN/A
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
The Price/Earnings ratio is 7.65, which indicates a rather cheap valuation of MCY.
Based on the Price/Earnings ratio, MCY is valued a bit cheaper than 77.62% of the companies in the same industry.
MCY's Price/Earnings ratio indicates a rather cheap valuation when compared to the S&P500 average which is at 28.87.
With a Price/Forward Earnings ratio of 37.53, MCY can be considered very expensive at the moment.
Based on the Price/Forward Earnings ratio, MCY is valued a bit more expensive than the industry average as 77.62% of the companies are valued more cheaply.
The average S&P500 Price/Forward Earnings ratio is at 21.38. MCY is valued rather expensively when compared to this.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 7.65 | ||
| Fwd PE | 37.53 |
4.2 Price Multiples
Based on the Enterprise Value to EBITDA ratio, MCY is valued cheaper than 81.12% of the companies in the same industry.
MCY's Price/Free Cash Flow ratio is rather cheap when compared to the industry. MCY is cheaper than 80.42% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 3.07 | ||
| EV/EBITDA | 4.45 |
4.3 Compensation for Growth
The decent profitability rating of MCY may justify a higher PE ratio.
A cheap valuation may be justified as MCY's earnings are expected to decrease with -9.16% in the coming years.
PEG (NY)N/A
PEG (5Y)0.34
EPS Next 2Y-9.16%
EPS Next 3YN/A
5. Dividend
5.1 Amount
With a Yearly Dividend Yield of 2.33%, MCY has a reasonable but not impressive dividend return.
Compared to an average industry Dividend Yield of 3.22, MCY pays a bit more dividend than its industry peers.
Compared to an average S&P500 Dividend Yield of 2.46, MCY has a dividend comparable with the average S&P500 company.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 2.33% |
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.
MCY has decreased its dividend recently.
Dividend Growth(5Y)-12.76%
Div Incr Years0
Div Non Decr Years1
5.3 Sustainability
MCY pays out 15.03% of its income as dividend. This is a sustainable payout ratio.
MCY's earnings and Dividend Rate are declining. This means the current dividend is most likely not sustainable.
DP15.03%
EPS Next 2Y-9.16%
EPS Next 3YN/A
54.97
+1.06 (+1.97%)
Chartmill FA Rating
GICS SectorFinancials
GICS IndustryGroupInsurance
GICS IndustryInsurance
Earnings (Last)
Earnings (Next)
Inst Owners44.4%
Inst Owner Change3.03%
Ins Owners35.51%
Ins Owner Change-0.01%
Market Cap3.04B
Analysts80
Price Target81.6 (48.44%)
Short Float %9.13%
Short Ratio4.83
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 2.33% |
Yearly Dividend1.27
Dividend Growth(5Y)-12.76%
DP15.03%
Div Incr Years0
Div Non Decr Years1
Ex-Date
Surprises & Revisions
EPS beat(2)2
Avg EPS beat(2)96.84%
Min EPS beat(2)47.93%
Max EPS beat(2)145.76%
EPS beat(4)4
Avg EPS beat(4)186.6%
Min EPS beat(4)34.9%
Max EPS beat(4)517.82%
EPS beat(8)6
Avg EPS beat(8)233.65%
EPS beat(12)7
Avg EPS beat(12)88.03%
EPS beat(16)8
Avg EPS beat(16)55.79%
Revenue beat(2)1
Avg Revenue beat(2)3.68%
Min Revenue beat(2)-3.38%
Max Revenue beat(2)10.74%
Revenue beat(4)2
Avg Revenue beat(4)1.71%
Min Revenue beat(4)-3.38%
Max Revenue beat(4)10.74%
Revenue beat(8)4
Avg Revenue beat(8)2.96%
Revenue beat(12)5
Avg Revenue beat(12)-2.3%
Revenue beat(16)8
Avg Revenue beat(16)-0.76%
PT rev (1m)0%
PT rev (3m)0%
EPS NQ rev (1m)0%
EPS NQ rev (3m)-303.12%
EPS NY rev (1m)0%
EPS NY rev (3m)-79.14%
Revenue NQ rev (1m)0%
Revenue NQ rev (3m)3.69%
Revenue NY rev (1m)0%
Revenue NY rev (3m)3.95%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 7.65 | ||
| Fwd PE | 37.53 | ||
| P/S | 0.56 | ||
| P/FCF | 3.07 | ||
| P/OCF | 2.94 | ||
| P/B | 1.56 | ||
| P/tB | 1.61 | ||
| EV/EBITDA | 4.45 |
EPS(TTM)7.19
EY13.08%
EPS(NY)1.46
Fwd EY2.66%
FCF(TTM)17.89
FCFY32.55%
OCF(TTM)18.72
OCFY34.06%
SpS98.86
BVpS35.14
TBVpS34.23
PEG (NY)N/A
PEG (5Y)0.34
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 5.63% | ||
| ROE | 24.04% | ||
| ROCE | 7.54% | ||
| ROIC | 6.72% | ||
| ROICexc | 7.38% | ||
| ROICexgc | 7.62% | ||
| OM | 11.06% | ||
| PM (TTM) | 8.55% | ||
| GM | N/A | ||
| FCFM | 18.1% |
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-Score8
Asset Turnover0.66
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.29 | ||
| Debt/FCF | 0.58 | ||
| Debt/EBITDA | 0.9 | ||
| Cap/Depr | 144.43% | ||
| Cap/Sales | 0.84% | ||
| Interest Coverage | 20.14 | ||
| Cash Conversion | 162.65% | ||
| Profit Quality | 211.77% | ||
| Current Ratio | 0.22 | ||
| Quick Ratio | 0.22 | ||
| Altman-Z | 1.46 |
F-Score8
WACC8.25%
ROIC/WACC0.81
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)2296.67%
EPS 3Y35.66%
EPS 5Y22.56%
EPS Q2Q%141.74%
EPS Next Y-79.63%
EPS Next 2Y-9.16%
EPS Next 3YN/A
EPS Next 5YN/A
Revenue 1Y (TTM)18.27%
Revenue growth 3Y11.1%
Revenue growth 5Y6.63%
Sales Q2Q%-0.62%
Revenue Next Year7.42%
Revenue Next 2Y7.27%
Revenue Next 3YN/A
Revenue Next 5YN/A
EBIT growth 1Y389.99%
EBIT growth 3Y24.17%
EBIT growth 5Y8.92%
EBIT Next YearN/A
EBIT Next 3YN/A
EBIT Next 5YN/A
FCF growth 1Y138.11%
FCF growth 3Y29.13%
FCF growth 5Y15.62%
OCF growth 1Y128.95%
OCF growth 3Y27.4%
OCF growth 5Y14.82%