NYSE:MCY

Stock Analysis Report

Executive Summary

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

Rewards

PE ratio (9x) is below the US market (18.4x)

Became profitable this year

Pays a high and reliable dividend of 4.86%

Risk Analysis

Earnings are forecast to decline by an average of -19.5% per year for the next 3 years



Snowflake Analysis

6 star dividend payer with acceptable track record.


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: MCY has not had significant price volatility in the past 3 months.


Market Performance


7 Day Return

5.8%

MCY

0.9%

US Insurance

1.5%

US Market


1 Year Return

-3.6%

MCY

19.2%

US Insurance

20.1%

US Market

Return vs Industry: MCY underperformed the US Insurance industry which returned 19.2% over the past year.

Return vs Market: MCY underperformed the US Market which returned 20.1% over the past year.


Shareholder returns

MCYIndustryMarket
7 Day5.8%0.9%1.5%
30 Day8.1%3.3%1.4%
90 Day5.0%6.8%8.7%
1 Year1.0%-3.6%22.1%19.2%22.7%20.1%
3 Year2.4%-11.0%37.3%26.8%50.1%40.5%
5 Year21.7%-3.6%73.7%52.9%73.1%54.1%

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

Valuation

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

8.96x

Price to Earnings (PE) ratio


Share Price vs. Fair Value

Below Fair Value: MCY ($51.8) is trading above our estimate of fair value ($26.41)

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


Price To Earnings Ratio

PE vs Industry: MCY is good value based on its PE Ratio (9x) compared to the Insurance industry average (14x).

PE vs Market: MCY is good value based on its PE Ratio (9x) compared to the US market (18.4x).


Price to Earnings Growth Ratio

PEG Ratio: MCY's earnings are forecast to decline next year, so we can't calculate its PEG ratio.


Price to Book Ratio

PB vs Industry: MCY is overvalued based on its PB Ratio (1.6x) compared to the US Insurance industry average (1.1x).


Next Steps

Future Growth

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

-19.5%

Forecasted annual earnings growth


Earnings and Revenue Growth Forecasts


Analyst Future Growth Forecasts

Earnings vs Savings Rate: MCY's earnings are forecast to decline over the next 3 years (-19.5% per year).

Earnings vs Market: MCY's earnings are forecast to decline over the next 3 years (-19.5% per year).

High Growth Earnings: MCY's earnings are forecast to decline over the next 3 years.

Revenue vs Market: MCY's revenue (0.2% per year) is forecast to grow slower than the US market (7.6% per year).

High Growth Revenue: MCY's revenue (0.2% 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 MCY's Return on Equity is forecast to be high in 3 years time


Next Steps

Past Performance

How has Mercury General performed over the past 5 years?

17.5%

Historical annual earnings growth


Earnings and Revenue History

Quality Earnings: MCY has high quality earnings.

Growing Profit Margin: MCY became profitable in the past.


Past Earnings Growth Analysis

Earnings Trend: MCY's earnings have grown by 17.5% per year over the past 5 years.

Accelerating Growth: MCY has become profitable in the last year, making the earnings growth rate difficult to compare to its 5-year average.

Earnings vs Industry: MCY has become profitable in the last year, making it difficult to compare its past year earnings growth to the Insurance industry (22%).


Return on Equity

High ROE: MCY's Return on Equity (17.8%) is considered low.


Return on Assets


Return on Capital Employed


Next Steps

Financial Health

How is Mercury General's financial position? (This company is analysed differently as a bank or financial institution)


Financial Position Analysis


Debt to Equity History and Analysis


Balance Sheet

Inventory Level: MCY has a low level of unsold assets or inventory.

Debt Coverage by Assets: MCY's debt is covered by short term assets (assets are 4.1x debt).


Financial Institutions Analysis

Asset Level: MCY's level of assets compared to its equity is low.

Allowance for Bad Loans: Insufficient data to determine if MCY has a sufficient allowance for bad loans.

Low Risk Liabilities: MCY reports no customer deposits, loans are made up entirely of externally borrowed funds.

Loan Level: Insufficient data to determine if MCY has an acceptable proportion of non-loan assets held.

Low Risk Deposits: MCY has advanced significantly more loans than the customer deposits it holds.

Level of Bad Loans: Insufficient data to determine if MCY has an appropriate level of bad loans.


Next Steps

Dividend

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

4.86%

Current Dividend Yield


Upcoming Dividend Payment

Purchase Mercury General before the 'Buy Limit' to receive their next dividend payment.


Dividend Yield vs Market

company4.9%marketbottom25%1.4%markettop25%3.7%industryaverage2.2%forecastin3Years4.8%

Current dividend yield vs market & industry

Notable Dividend: MCY's dividend (4.86%) is higher than the bottom 25% of dividend payers in the US market (1.44%).

High Dividend: MCY's dividend (4.86%) is in the top 25% of dividend payers in the US market (3.69%)


Stability and Growth of Payments

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

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


Current Payout to Shareholders

Dividend Coverage: With its reasonably low payout ratio (43.4%), MCY's dividend payments are well covered by earnings.


Future Payout to Shareholders

Future Dividend Coverage: MCY's dividends in 3 years are forecast to be covered by earnings (68.3% payout ratio).


Next Steps

Management

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

12.1yrs

Average management tenure


CEO

Gabe Tirador (54yo)

13.1yrs

Tenure

US$1,530,049

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 ($USD1.53M) is below average for companies of similar size in the US market ($USD4.88M).

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


Leadership Team

NamePositionTenureCompensationOwnership
Gabriel Tirador
President13.1yrsUS$1.53m0.073% $2.1m
Theodore Stalick
Senior VP & CFO18.3yrsUS$753.31k0.0083% $239.4k
Christopher Graves
VP & Chief Investment Officer22.1yrsUS$718.82k0.012% $338.9k
Abby Hosseini
Chief Information Officer & VP0yrsno datano data
Erik Thompson
Vice President of Advertising & Public Relations2.3yrsno datano data
Brandt Minnich
VP & Chief Marketing Officer11.1yrsno datano data
Heidi Sullivan
VP & Chief Human Capital Officer0yrsno datano data
Randall Petro
VP & Chief Claims Officer4.9yrsno datano data
Victor Joseph
VP & Chief Underwriting Officer2.6yrsno datano data
Judith Walters
VP of Corporate Affairs & Secretary38.1yrsno datano data

12.1yrs

Average Tenure

53.5yo

Average Age

Experienced Management: MCY's management team is seasoned and experienced (12.1 years average tenure).


Board Members

NamePositionTenureCompensationOwnership
Gabriel Tirador
President13.1yrsUS$1.53m0.073% $2.1m
George Joseph
Chairman of the Board59.1yrsUS$1.21m33.98% $974.3m
James Ellis
Independent Director6yrsUS$54.50kno data
Joshua Little
Independent Director3yrsUS$69.00k0.0014% $38.7k
Martha Marcon
Lead Independent Director2.8yrsUS$101.00kno data
Ramona Cappello
Independent Director1.3yrsUS$12.00kno data
George Braunegg
Independent Director1.3yrsUS$12.00k0.0019% $53.0k

3.0yrs

Average Tenure

61yo

Average Age

Experienced Board: MCY's board of directors are considered experienced (3 years average tenure).


Ownership

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


Insider Trading Volume

Insider Buying: Insufficient data to determine if 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: MCY
  • Exchange: NYSE
  • Founded: 1961
  • Industry: Property and Casualty Insurance
  • Sector: Insurance
  • Market Cap: US$2.868b
  • 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. The company also writes homeowners, commercial automobile, commercial property, mechanical protection, fire, and umbrella insurance. Its automobile insurance products cover collision, property damage, bodily injury, comprehensive, personal injury protection, underinsured and uninsured motorist, and other hazards; and homeowners’ insurance products cover dwelling, liability, personal property, fire, and other hazards. The company sells its policies through a network of independent agents, 100% owned insurance agents, and direct channels in Arizona, California, Florida, Georgia, Illinois, Nevada, New Jersey, New York, Oklahoma, Texas, and Virginia. Mercury General Corporation was founded in 1961 and is headquartered in Los Angeles, California. 


Company Analysis and Financial Data Status

All financial data provided by Standard & Poor's Capital IQ.
DataLast Updated (UTC time)
Company Analysis2020/02/16 23:42
End of Day Share Price2020/02/14 00:00
Earnings2019/12/31
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.