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 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.
In the past year MCY had a positive cash flow from operations.
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
MCY has a Return On Assets of 5.63%. This is amongst the best in the industry. MCY outperforms 86.71% of its industry peers.
The Return On Equity of MCY (24.04%) is better than 91.61% of its industry peers.
The Return On Invested Capital of MCY (6.72%) is better than 87.41% of its industry peers.
| 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
MCY has a Profit Margin (8.55%) which is comparable to the rest of the industry.
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 11.06%, MCY perfoms like the industry average, 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.
MCY has about the same amout of shares outstanding than it did 1 year ago.
MCY has about the same amout of shares outstanding than it did 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 1.47. 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 1.47 is amongst the best of the industry. MCY outperforms 83.92% of its industry peers.
The Debt to FCF ratio of MCY is 0.58, which is an excellent value as it means it would take MCY, only 0.58 years of fcf income to pay off all of its debts.
MCY's Debt to FCF ratio of 0.58 is fine compared to the rest of the industry. MCY outperforms 74.83% of its industry peers.
A Debt/Equity ratio of 0.29 indicates that MCY is not too dependend on debt financing.
The Debt to Equity ratio of MCY (0.29) is comparable to the rest of the industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.29 | ||
| Debt/FCF | 0.58 | ||
| Altman-Z | 1.47 |
ROIC/WACC0.81
WACC8.31%
2.3 Liquidity
MCY has a Current 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.
MCY has a better Current ratio (0.22) than 69.23% of its industry peers.
A Quick Ratio of 0.22 indicates that MCY may have some problems paying its short term obligations.
MCY has a better Quick ratio (0.22) than 69.23% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 0.22 | ||
| Quick Ratio | 0.22 |
3. Growth
3.1 Past
MCY shows a strong growth in Earnings Per Share. In the last year, the EPS has been growing by 2296.67%, 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
The Revenue has grown by 18.27% 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)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.
MCY is expected to show a small growth in Revenue. In the coming years, the Revenue will grow by 7.27% yearly.
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.
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 cheaply with a Price/Earnings ratio of 7.97.
Based on the Price/Earnings ratio, MCY is valued a bit cheaper than 76.92% of the companies in the same industry.
Compared to an average S&P500 Price/Earnings ratio of 28.22, MCY is valued rather cheaply.
MCY is valuated quite expensively with a Price/Forward Earnings ratio of 39.15.
MCY's Price/Forward Earnings ratio is a bit more expensive when compared to the industry. MCY is more expensive than 78.32% of the companies in the same industry.
MCY is valuated expensively when we compare the Price/Forward Earnings ratio to 20.86, which is the current average of the S&P500 Index.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 7.97 | ||
| Fwd PE | 39.15 |
4.2 Price Multiples
Based on the Enterprise Value to EBITDA ratio, MCY is valued cheaper than 80.42% of the companies in the same industry.
Based on the Price/Free Cash Flow ratio, MCY is valued a bit cheaper than 79.72% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 3.2 | ||
| EV/EBITDA | 4.58 |
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)0.35
EPS Next 2Y-9.16%
EPS Next 3YN/A
5. Dividend
5.1 Amount
With a Yearly Dividend Yield of 2.29%, MCY has a reasonable but not impressive dividend return.
MCY's Dividend Yield is a higher than the industry average which is at 3.27.
Compared to an average S&P500 Dividend Yield of 2.44, MCY has a dividend comparable with the average S&P500 company.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 2.29% |
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.
The dividend of MCY decreased 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
57.33
+1.97 (+3.56%)
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 Cap3.18B
Analysts80
Price Target81.6 (42.33%)
Short Float %7.14%
Short Ratio3.93
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 2.29% |
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 | 7.97 | ||
| Fwd PE | 39.15 | ||
| P/S | 0.58 | ||
| P/FCF | 3.2 | ||
| P/OCF | 3.06 | ||
| P/B | 1.63 | ||
| P/tB | 1.67 | ||
| EV/EBITDA | 4.58 |
EPS(TTM)7.19
EY12.54%
EPS(NY)1.46
Fwd EY2.55%
FCF(TTM)17.89
FCFY31.21%
OCF(TTM)18.72
OCFY32.66%
SpS98.86
BVpS35.14
TBVpS34.23
PEG (NY)N/A
PEG (5Y)0.35
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 | 1.47 |
F-Score8
WACC8.31%
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%