MERCURY GENERAL CORP (MCY)
US5894001008 - Common Stock
Overall MCY gets a fundamental rating of 4 out of 10. We evaluated MCY against 141 industry peers in the Insurance industry. MCY scores quite bad on profitability, while its financial health is fine. Not spectacular, but in line with the averages. MCY is not overvalued while it is showing excellent growth. This is an interesting combination.
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 has a Return On Assets (1.36%) which is in line with its industry peers.
Looking at the Return On Equity, with a value of 6.23%, MCY is in line with its industry, outperforming 43.88% of the companies in the same industry.
MCY has a Return On Invested Capital of 1.41%. This is comparable to the rest of the industry: MCY outperforms 52.52% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 1.36% | ||
| ROE | 6.23% | ||
| ROIC | 1.41% |
ROA(3y)-0.95%
ROA(5y)1.7%
ROE(3y)-5.29%
ROE(5y)4.07%
ROIC(3y)N/A
ROIC(5y)N/A
1.3 Margins
MCY has a worse Profit Margin (2.08%) than 64.75% of its industry peers.
MCY's Profit Margin has declined in the last couple of years.
MCY's Operating Margin of 2.67% is on the low side compared to the rest of the industry. MCY is outperformed by 67.63% of its industry peers.
MCY's Operating Margin has declined in the last couple of years.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 2.67% | ||
| PM (TTM) | 2.08% | ||
| GM | N/A |
OM growth 3Y-40.33%
OM growth 5YN/A
PM growth 3Y-40.54%
PM growth 5YN/A
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.
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.
Compared to 1 year ago, MCY has a worse debt to assets ratio.
2.2 Solvency
Based on the Altman-Z score of 1.30, we must say that MCY is in the distress zone and has some risk of bankruptcy.
MCY has a Altman-Z score of 1.30. This is amongst the best in the industry. MCY outperforms 87.77% of its industry peers.
The Debt to FCF ratio of MCY is 1.38, which is an excellent value as it means it would take MCY, only 1.38 years of fcf income to pay off all of its debts.
Looking at the Debt to FCF ratio, with a value of 1.38, MCY is in the better half of the industry, outperforming 64.03% of the companies in the same industry.
MCY has a Debt/Equity ratio of 0.37. This is a healthy value indicating a solid balance between debt and equity.
The Debt to Equity ratio of MCY (0.37) is comparable to the rest of the industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.37 | ||
| Debt/FCF | 1.38 | ||
| Altman-Z | 1.3 |
ROIC/WACC0.17
WACC8.49%
2.3 Liquidity
A Current Ratio of 0.14 indicates that MCY may have some problems paying its short term obligations.
The Current ratio of MCY (0.14) is better than 66.91% of its industry peers.
MCY has a Quick Ratio of 0.14. 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 Quick ratio value of 0.14, MCY is doing good in the industry, outperforming 66.91% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 0.14 | ||
| Quick Ratio | 0.14 |
3. Growth
3.1 Past
The Earnings Per Share has grown by an impressive 113.10% over the past year.
Measured over the past years, MCY shows a very negative growth in Earnings Per Share. The EPS has been decreasing by -30.12% on average per year.
The Revenue has grown by 27.08% in the past year. This is a very strong growth!
MCY shows a small growth in Revenue. Measured over the last years, the Revenue has been growing by 6.49% yearly.
EPS 1Y (TTM)113.1%
EPS 3Y-62.17%
EPS 5Y-30.12%
EPS growth Q2Q179.31%
Revenue 1Y (TTM)27.08%
Revenue growth 3Y6.95%
Revenue growth 5Y6.49%
Revenue growth Q2Q19.36%
3.2 Future
Based on estimates for the next years, MCY will show a very strong growth in Earnings Per Share. The EPS will grow by 297.79% on average per year.
The Revenue is expected to grow by 15.06% on average over the next years. This is quite good.
EPS Next Y1061.5%
EPS Next 2Y297.79%
EPS Next 3YN/A
EPS Next 5YN/A
Revenue Next Year19.3%
Revenue Next 2Y15.06%
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 accelerating.
The Revenue growth rate is accelerating: in the next years the growth will be better than in the last years.
4. Valuation
4.1 Price/Earnings Ratio
With a Price/Earnings ratio of 184.07, MCY can be considered very expensive at the moment.
MCY's Price/Earnings ratio is a bit more expensive when compared to the industry. MCY is more expensive than 78.42% of the companies in the same industry.
The average S&P500 Price/Earnings ratio is at 25.25. MCY is valued rather expensively when compared to this.
The Price/Forward Earnings ratio is 15.85, which indicates a correct valuation of MCY.
Compared to the rest of the industry, the Price/Forward Earnings ratio of MCY is on the same level as its industry peers.
MCY is valuated rather cheaply when we compare the Price/Forward Earnings ratio to 21.67, which is the current average of the S&P500 Index.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 184.07 | ||
| Fwd PE | 15.85 |
4.2 Price Multiples
Compared to the rest of the industry, the Enterprise Value to EBITDA ratio of MCY is on the same level as its industry peers.
MCY's Price/Free Cash Flow ratio is a bit cheaper when compared to the industry. MCY is cheaper than 61.15% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 7.35 | ||
| EV/EBITDA | 18.28 |
4.3 Compensation for Growth
The low PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates a rather cheap valuation of the company.
MCY's earnings are expected to grow with 297.79% in the coming years. This may justify a more expensive valuation.
PEG (NY)0.17
PEG (5Y)N/A
EPS Next 2Y297.79%
EPS Next 3YN/A
5. Dividend
5.1 Amount
MCY has a Yearly Dividend Yield of 2.41%. Purely for dividend investing, there may be better candidates out there.
MCY's Dividend Yield is a higher than the industry average which is at 4.36.
MCY's Dividend Yield is comparable with the S&P500 average which is at 2.45.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 2.41% |
5.2 History
The dividend of MCY decreases each year by -12.70%.
MCY has paid a dividend for at least 10 years, which is a reliable track record.
Dividend Growth(5Y)-12.7%
Div Incr Years0
Div Non Decr Years0
5.3 Sustainability
72.95% of the earnings are spent on dividend by MCY. This is not a sustainable payout ratio.
DP72.95%
EPS Next 2Y297.79%
EPS Next 3YN/A
MERCURY GENERAL CORP
NYSE:MCY (4/24/2024, 7:15:44 PM)
After market: 53.663 -1.56 (-2.82%)55.22
-1.54 (-2.71%)
Chartmill FA Rating
GICS SectorFinancials
GICS IndustryGroupInsurance
GICS IndustryInsurance
Earnings (Last)
Earnings (Next)
Inst Owners
Inst Owner Change
Ins Owners
Ins Owner Change
Market Cap3.06B
Analysts
Price Target
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 2.41% |
Dividend Growth(5Y)
DP
Div Incr Years
Div Non Decr Years
Ex-Date
Surprises & Revisions
EPS beat(2)
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PT rev (1m)
PT rev (3m)
EPS NQ rev (1m)
EPS NQ rev (3m)
EPS NY rev (1m)
EPS NY rev (3m)
Revenue NQ rev (1m)
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Revenue NY rev (1m)
Revenue NY rev (3m)
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 184.07 | ||
| Fwd PE | 15.85 | ||
| P/S | |||
| P/FCF | |||
| P/OCF | |||
| P/B | |||
| P/tB | |||
| EV/EBITDA |
EPS(TTM)
EY
EPS(NY)
Fwd EY
FCF(TTM)
FCFY
OCF(TTM)
OCFY
SpS
BVpS
TBVpS
PEG (NY)0.17
PEG (5Y)N/A
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 1.36% | ||
| ROE | 6.23% | ||
| ROCE | |||
| ROIC | |||
| ROICexc | |||
| ROICexgc | |||
| OM | 2.67% | ||
| PM (TTM) | 2.08% | ||
| GM | N/A | ||
| FCFM |
ROA(3y)
ROA(5y)
ROE(3y)
ROE(5y)
ROIC(3y)
ROIC(5y)
ROICexc(3y)
ROICexc(5y)
ROICexgc(3y)
ROICexgc(5y)
ROCE(3y)
ROCE(5y)
ROICexcg growth 3Y
ROICexcg growth 5Y
ROICexc growth 3Y
ROICexc growth 5Y
OM growth 3Y
OM growth 5Y
PM growth 3Y
PM growth 5Y
GM growth 3Y
GM growth 5Y
F-Score
Asset Turnover0.65
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.37 | ||
| Debt/FCF | |||
| Debt/EBITDA | |||
| Cap/Depr | |||
| Cap/Sales | |||
| Interest Coverage | |||
| Cash Conversion | |||
| Profit Quality | |||
| Current Ratio | 0.14 | ||
| Quick Ratio | 0.14 | ||
| Altman-Z |
F-Score
WACC
ROIC/WACC
Cap/Depr(3y)
Cap/Depr(5y)
Cap/Sales(3y)
Cap/Sales(5y)
Profit Quality(3y)
Profit Quality(5y)
Growth
EPS 1Y (TTM)113.1%
EPS 3Y-62.17%
EPS 5Y
EPS growth Q2Q
EPS Next Y1061.5%
EPS Next 2Y
EPS Next 3Y
EPS Next 5Y
Revenue 1Y (TTM)27.08%
Revenue growth 3Y6.95%
Revenue growth 5Y
Revenue growth Q2Q
Revenue Next Year
Revenue Next 2Y
Revenue Next 3Y
Revenue Next 5Y
EBIT growth 1Y
EBIT growth 3Y
EBIT growth 5Y
EBIT Next Year
EBIT Next 3Y
EBIT Next 5Y
FCF growth 1Y
FCF growth 3Y
FCF growth 5Y
OCF growth 1Y
OCF growth 3Y
OCF growth 5Y