DB:MCG

Stock Analysis Report

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Executive Summary

Mercury General Corporation, together with its subsidiaries, engages in writing personal automobile insurance in the United States.


Snowflake Analysis

Average dividend payer with moderate growth potential.


Similar Companies

Share Price & News

How has Mercury General's share price performed over time and what events caused price changes?


Latest Share Price and Events

Stable Share Price: MCG has not had significant price volatility in the past 3 months.


Market Performance


7 Day Return

5.2%

MCG

-4.3%

DE Insurance

-3.6%

DE Market


1 Year Return

-26.9%

MCG

-8.3%

DE Insurance

3.7%

DE Market

Return vs Industry: MCG underperformed the German Insurance industry which returned -8.3% over the past year.

Return vs Market: MCG underperformed the German Market which returned 3.8% over the past year.


Shareholder returns

MCGIndustryMarket
7 Day5.2%-4.3%-3.6%
30 Day2.8%-4.8%-2.0%
90 Day1.1%8.5%13.3%
1 Year-22.8%-26.9%-3.3%-8.3%6.0%3.7%
3 Year-16.0%-27.7%18.2%2.9%1.1%-6.9%
5 Year-7.2%-27.1%51.9%20.5%7.8%-6.8%

Price Volatility Vs. Market

How volatile is Mercury General's share price compared to the market and industry in the last 5 years?


Simply Wall St News

No news available

Valuation

Is Mercury General undervalued compared to its fair value and its price relative to the market?

53.04x

Price to Earnings (PE) ratio


Share Price vs. Fair Value

Below Fair Value: MCG (€34.8) is trading above our estimate of fair value (€26.77)

Significantly Below Fair Value: MCG is trading above our estimate of fair value.


Price To Earnings Ratio

PE vs Industry: MCG is poor value based on its PE Ratio (52.8x) compared to the DE Insurance industry average (10x).

PE vs Market: MCG is poor value based on its PE Ratio (52.8x) compared to the German market (20.9x).


Price to Earnings Growth Ratio

PEG Ratio: MCG is good value based on its PEG Ratio (0.4x)


Price to Book Ratio

PB vs Industry: MCG is overvalued based on its PB Ratio (1.5x) compared to the DE Insurance industry average (1x).


Next Steps

Future Growth

How is Mercury General forecast to perform in the next 1 to 3 years based on estimates from 2 analysts?

132.8%

Forecasted annual earnings growth


Earnings and Revenue Growth Forecasts


Analyst Future Growth Forecasts

Earnings vs Savings Rate: MCG's forecast earnings growth (132.8% per year) is above the savings rate (0.2%).

Earnings vs Market: MCG's earnings (132.8% per year) are forecast to grow faster than the German market (23.4% per year).

High Growth Earnings: earnings are expected to grow significantly over the next 3 years.

Revenue vs Market: MCG's revenue (1.2% per year) is forecast to grow slower than the German market (5.9% per year).

High Growth Revenue: MCG's revenue (1.2% per year) is forecast to grow slower than 20% per year.


Earnings per Share Growth Forecasts


Future Return on Equity

Future ROE: Insufficient data to determine if MCG's Return on Equity is forecast to be high in 3 years time


Next Steps

  • Explore growth companies in the Insurance industry.

Past Performance

How has Mercury General performed over the past 5 years?

23.3%

Historical annual earnings growth


Earnings and Revenue History

Quality Earnings: MCG has high quality earnings.

Growing Profit Margin: MCG's current net profit margins (1.2%) are lower than last year (4.8%).


Past Earnings Growth Analysis

Earnings Trend: MCG's earnings have grown by 18.7% per year over the past 5 years.

Accelerating Growth: MCG's has had negative earnings growth over the past year, so it can't be compared to its 5-year average.

Earnings vs Industry: MCG had negative earnings growth (-74%) over the past year, making it difficult to compare to the Insurance industry average (10%).


Return on Equity

High ROE: MCG's Return on Equity (2.8%) is considered low.


Next Steps

Financial Health

How is Mercury General's financial position?


Financial Position Analysis

Short Term Liabilities: MCG's short term assets ($1.2B) do not cover its short term liabilities ($1.5B).

Long Term Liabilities: MCG's short term assets ($1.2B) do not cover its long term liabilities ($2.5B).


Debt to Equity History and Analysis

Debt Level: MCG's debt to equity ratio (22%) is considered satisfactory.

Reducing Debt: MCG's debt to equity ratio has increased from 15.6% to 22% over the past 5 years.

Debt Coverage: MCG's debt is well covered by operating cash flow (123.6%).

Interest Coverage: MCG's interest payments on its debt are not well covered by EBIT (2.8x coverage).


Balance Sheet


Next Steps

Dividend

What is Mercury General current dividend yield, its reliability and sustainability?

5.84%

Current Dividend Yield


Dividend Yield vs Market

Notable Dividend: MCG's dividend (5.87%) is higher than the bottom 25% of dividend payers in the German market (1.25%).

High Dividend: MCG's dividend (5.87%) is in the top 25% of dividend payers in the German market (3.83%)


Stability and Growth of Payments

Stable Dividend: MCG's dividends per share have been stable in the past 10 years.

Growing Dividend: MCG's dividend payments have increased over the past 10 years.


Current Payout to Shareholders

Dividend Coverage: With its high payout ratio (309.3%), MCG's dividend payments are not well covered by earnings.


Future Payout to Shareholders

Future Dividend Coverage: Insufficient data to determine if a dividend will be paid in 3 years and that it will be covered by earnings.


Next Steps

Management

How experienced are the management team and are they aligned to shareholders interests?

12.6yrs

Average management tenure


CEO

Gabe Tirador (55 yo)

13.58yrs

Tenure

€1,706,295

Compensation

Mr. Gabriel Tirador, also known as Gabe, has been the President of California Automobile Insurance Company and Mercury General Corporation since October 2001 and has been its Chief Executive Officer since ...


CEO Compensation Analysis

Compensation vs Market: Gabe's total compensation ($USD1.71M) is about average for companies of similar size in the German market ($USD1.49M).

Compensation vs Earnings: Gabe's compensation has been consistent with company performance over the past year.


Leadership Team

NamePositionTenureCompensationOwnership
George Joseph
Executive Chairman of the Board59.58yrs€1.74m35.43%
€ 716.6m
Gabriel Tirador
President13.58yrs€1.71m0.079%
€ 1.6m
Theodore Stalick
Senior VP & CFO18.83yrs€996.75k0.0085%
€ 172.7k
Christopher Graves
VP & Chief Investment Officer22.58yrs€784.76k0.012%
€ 241.1k
Abby Hosseini
VP & Chief Information Officerno data€554.45k0.0014%
€ 27.5k
Erik Thompson
Vice President of Advertising & Public Relations2.83yrsno datano data
Brandt Minnich
VP & Chief Marketing Officer11.58yrsno data0.0049%
€ 98.7k
Heidi Sullivan
VP & Chief Human Capital Officerno datano datano data
Randall Petro
VP & Chief Claims Officer5.42yrsno datano data
Victor Joseph
VP & Chief Underwriting Officer3.08yrsno datano data
Jeffrey Schroeder
VP & Chief Product Officerno datano data0.0016%
€ 33.0k
Judith Walters
VP of Corporate Affairs & Secretary38.58yrsno datano data

12.6yrs

Average Tenure

54.5yo

Average Age

Experienced Management: MCG's management team is seasoned and experienced (12.6 years average tenure).


Board Members

NamePositionTenureCompensationOwnership
George Joseph
Executive Chairman of the Board59.58yrs€1.74m35.43%
€ 716.6m
Gabriel Tirador
President13.58yrs€1.71m0.079%
€ 1.6m
James Ellis
Independent Director6.5yrs€61.00kno data
Joshua Little
Independent Director3.5yrs€72.00k0.0025%
€ 51.2k
Martha Marcon
Lead Independent Director3.25yrs€96.00kno data
Ramona Cappello
Independent Director1.83yrs€66.00kno data
George Braunegg
Independent Director1.83yrs€62.00k0.0045%
€ 91.4k

3.5yrs

Average Tenure

62yo

Average Age

Experienced Board: MCG's board of directors are considered experienced (3.5 years average tenure).


Ownership

Who are the major shareholders and have insiders been buying or selling?


Insider Trading Volume

Insider Buying: MCG insiders have bought more shares than they have sold in the past 3 months.


Recent Insider Transactions

Ownership Breakdown

Dilution of Shares: Shareholders have not been meaningfully diluted in the past year.


Top Shareholders

Company Information

Mercury General Corporation's company bio, employee growth, exchange listings and data sources


Key Information

  • Name: Mercury General Corporation
  • Ticker: MCG
  • Exchange: DB
  • Founded: 1961
  • Industry: Property and Casualty Insurance
  • Sector: Insurance
  • Market Cap: US$2.375b
  • Listing Market Cap: US$2.022b
  • Shares outstanding: 55.36m
  • Website: https://www.mercuryinsurance.com

Number of Employees


Location

  • Mercury General Corporation
  • 4484 Wilshire Boulevard
  • Los Angeles
  • California
  • 90010
  • United States

Listings

TickerExchangePrimary SecuritySecurity TypeCountryCurrencyListed on
MCYNYSE (New York Stock Exchange)YesCommon StockUSUSDNov 1985
MCGDB (Deutsche Boerse AG)YesCommon StockDEEURNov 1985

Biography

Mercury General Corporation, together with its subsidiaries, engages in writing personal automobile insurance in the United States. It also writes homeowners, commercial automobile, commercial property, me ...


Company Analysis and Financial Data Status

All financial data provided by Standard & Poor's Capital IQ.
DataLast Updated (UTC time)
Company Analysis2020/08/03 21:15
End of Day Share Price2020/08/03 00:00
Earnings2020/06/30
Annual Earnings2019/12/31


Unless specified all financial data is based on a yearly period but updated quarterly. This is known as Trailing Twelve Month (TTM) or Last Twelve Month (LTM) Data. Learn more here.