MERCURY GENERAL CORP (MCY) Stock Fundamental Analysis
NYSE:MCY - New York Stock Exchange, Inc. - US5894001008 - Common Stock - Currency: USD
Overall MCY gets a fundamental rating of 5 out of 10. We evaluated MCY against 143 industry peers in the Insurance industry. MCY has an average financial health and profitability rating. MCY has a correct valuation and a medium 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.
MCY had positive earnings in 4 of the past 5 years.
Each year in the past 5 years MCY had a positive operating cash flow.
1.2 Ratios
MCY's Return On Assets of 3.17% is fine compared to the rest of the industry. MCY outperforms 72.73% of its industry peers.
The Return On Equity of MCY (15.72%) is better than 76.92% of its industry peers.
MCY has a better Return On Invested Capital (3.77%) than 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
The Profit Margin of MCY (5.11%) is worse than 62.24% of its industry peers.
In the last couple of years the Profit Margin of MCY has remained more or less at the same level.
With a Operating Margin value of 6.68%, MCY is not doing good in the industry: 62.94% of the companies in the same industry are doing better.
In the last couple of years the Operating Margin of MCY has grown nicely.
| 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.
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 an improved debt to assets ratio.
2.2 Solvency
MCY has an Altman-Z score of 1.29. This is a bad value and indicates that MCY is not financially healthy and even has some risk of bankruptcy.
With an excellent Altman-Z score value of 1.29, MCY belongs to the best 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.
MCY has a better Debt to FCF ratio (0.79) than 69.93% of its industry peers.
MCY has a Debt/Equity ratio of 0.32. This is a healthy value indicating a solid balance between debt and equity.
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 | 1.29 |
ROIC/WACC0.44
WACC8.5%
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.
The Current ratio of MCY (0.80) is better than 76.92% of its industry peers.
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 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.
The Revenue has grown by 16.64% in the past year. This is quite good.
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)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
Based on the Price/Earnings ratio of 15.00, the valuation of MCY can be described as correct.
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.
Based on the Price/Forward Earnings ratio of 9.17, the valuation of MCY can be described as reasonable.
Based on the Price/Forward Earnings ratio, MCY is valued a bit cheaper than the industry average as 60.84% of the companies are valued more expensively.
When comparing the Price/Forward Earnings ratio of MCY to the average of the S&P500 Index (22.20), we can say 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 the industry average as 73.43% of the companies are valued more expensively.
Based on the Price/Free Cash Flow ratio, MCY is valued a bit cheaper than 69.93% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 4.71 | ||
| EV/EBITDA | 6.21 |
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.
Compared to an average industry Dividend Yield of 3.23, MCY has a dividend in line with its industry peers.
MCY's Dividend Yield is comparable with the S&P500 average which is at 2.40.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 2.1% |
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
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 | 6.21 |
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 | 1.29 |
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%