Mercury General Corporation
Mercury General Corporation Fundamental Analysis
Mercury General Corporation (MCY) shows strong financial fundamentals with a PE ratio of 8.80, profit margin of 9.03%, and ROE of 25.65%. The company generates $6.0B in annual revenue with strong year-over-year growth of 18.27%.
Key Strengths
Areas of Concern
The stock receives a Fundamental Health Score of 87.7/100 based on profitability, valuation, growth, and balance sheet metrics. The B+ grade reflects solid fundamentals with room for improvement in valuation or growth.
Fundamental Health Score
We analyze MCY's fundamental strength across five key dimensions:
Efficiency Score
WeakMCY struggles to generate sufficient returns from assets.
Valuation Score
ExcellentMCY trades at attractive valuation levels.
Growth Score
ModerateMCY shows steady but slowing expansion.
Financial Health Score
ExcellentMCY maintains a strong and stable balance sheet.
Profitability Score
ModerateMCY maintains healthy but balanced margins.
Key Financial Metrics
Is MCY Expensive or Cheap?
P/E Ratio
MCY trades at 8.80 times earnings. This suggests potential undervaluation.
PEG Ratio
When adjusting for growth, MCY's PEG of 0.38 indicates potential undervaluation.
Price to Book
The market values Mercury General Corporation at 1.97 times its book value. This may indicate undervaluation.
EV/EBITDA
Enterprise value stands at 7.17 times EBITDA. This is generally considered low.
How Well Does MCY Make Money?
Net Profit Margin
For every $100 in sales, Mercury General Corporation keeps $9.03 as profit after all expenses.
Operating Margin
Core operations generate 11.07 in profit for every $100 in revenue, before interest and taxes.
ROE
Management delivers $25.65 in profit for every $100 of shareholder equity.
ROA
Mercury General Corporation generates $5.66 in profit for every $100 in assets, demonstrating efficient asset deployment.
Following the Money - Real Cash Generation
Operating Cash Flow
Mercury General Corporation produces operating cash flow of $1.09B, showing steady but balanced cash generation.
Free Cash Flow
Mercury General Corporation generates strong free cash flow of $1.03B, providing ample flexibility for dividends, buybacks, or growth.
FCF Per Share
Each share generates $18.57 in free cash annually.
FCF Yield
MCY converts 21.63% of its market value into free cash.
Financial Ratios Analysis
Valuation Ratios
P/E Ratio
Price to earnings ratio
8.80
vs 25 benchmark
PEG Ratio
Price/earnings to growth ratio
0.38
vs 25 benchmark
P/B Ratio
Price to book value ratio
1.97
vs 25 benchmark
P/S Ratio
Price to sales ratio
0.79
vs 25 benchmark
Financial Health
Debt/Equity
Total debt to shareholders' equity
0.24
vs 25 benchmark
Current Ratio
Current assets to current liabilities
66.98
vs 25 benchmark
Efficiency Ratios
ROE
Return on equity percentage
0.26
vs 25 benchmark
ROA
Return on assets percentage
0.06
vs 25 benchmark
ROCE
Return on capital employed
0.07
vs 25 benchmark
How MCY Stacks Against Its Sector Peers
| Metric | MCY Value | Sector Average | Performance |
|---|---|---|---|
| P/E Ratio | 8.80 | 18.86 | Better (Cheaper) |
| ROE | 25.65% | 847.00% | Weak |
| Net Margin | 9.03% | 4202.00% | Weak |
| Debt/Equity | 0.24 | 0.91 | Strong (Low Leverage) |
| Current Ratio | 66.98 | 667.17 | Strong Liquidity |
| ROA | 5.66% | -21543.00% (disorted) | Weak |
MCY outperforms its industry in 3 out of 6 key metrics, but lagging in ROE.
Historical Growth Performance
5-Year Growth Trajectory
This section reviews Mercury General Corporation's 5-year compound annual growth rate (CAGR) and compares its performance against the typical investment style of its industry.
Revenue CAGR
37.78%
Industry Style: Value, Dividend, Cyclical
High GrowthEPS CAGR
46.14%
Industry Style: Value, Dividend, Cyclical
High GrowthFCF CAGR
99.49%
Industry Style: Value, Dividend, Cyclical
High Growth