Mercury General Corp

Finance
Property-Casualty Insurers
www.mercuryinsurance.com

Earnings Score
Moat Score
Safety Score

Market Cap $2.89B
PE 6
Debt $575.00M
Cash $720.26M
EV $2.75B
FCF $990.98M

Earnings

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Sales & Net Margins

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Earnings	$467.95M
EBIT	$574.88M
ROE	24%
ROA	7%
FCF	$990.98M
Equity	$1.95B
Growth Stability	-163%
PE	6.18
PEG	1.23
PB	1.49
P/FCF	2.92
P/S	0.53
Price/Cash	0.25
Debt/Equity	0.3
Debt/FCF	0.58
Net Margins	9%
Gross Margins	100%
Op. Margins	10%
Earnings CAGR	7%
Sales Growth YoY	-1%
Sales Growth QoQ	-11%
Sales CAGR	5%
FCF CAGR	9%
Equity CAGR	-1%
Earnings Stability	0.15
Earnings Growth YoY	-47%
Earnings Growth QoQ	-56%

Earnings CAGR 5Y	5%
Sales CAGR 5Y	8%
FCF CAGR 5Y	4%
Equity CAGR 5Y	-4%
Earnings CAGR 3Y	19%
Sales CAGR 3Y	19%
FCF CAGR 3Y	54%
Equity CAGR 3Y	3%
Market Cap	$2.89B
Revenue	$5.48B
Dividend Yield	2%
Payout Ratio	15%
Assets	$8.31B
Total Debt	$575.00M
Cash	$720.26M
Shares Outstanding	55.37M
EV	2.75B
Earnings Score	8%
Moat Score	88%
Safety Score	65%
Final Score	54%
Gross Profit	$5.46B
Shares Growth 3y	-0%
Equity Growth QoQ	5%
Equity Growth YoY	26%

Assets & ROA

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Stockholders Equity & ROE

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Mercury General Corp is an insurance holding company operating in the property-casualty market, where it focuses on low-cost auto insurance for individuals, with operations in nearly 13 United States of America states. However, its business--about 75% of premiums--comes from California, where it was established by George Joseph, the current company chairman and majority owner. Its insurance is distributed exclusively through independent agents.

SEC Filings

Direct access to Mercury General Corp (MCY) Annual Reports (10K) and Quarterly Reports (10Q) from the SEC website.

2024
- 10-K Dec 31
- 10-Q Sep 30
- 10-Q Jun 30
- 10-Q Mar 31
2023
- 10-K Dec 31
- 10-Q Sep 30
- 10-Q Jun 30
- 10-Q Mar 31
2022
- 10-K Dec 31
- 10-Q Sep 30
- 10-Q Jun 30
- 10-Q Mar 31

Sector Comparison

How does Mercury General Corp compare to its competitors?

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Peter Lynch's Chart

This chart shows the current pricing of Mercury General Corp compared to its past. The addition of the earnings trend line provides further insights into the company's earnings power.

CAGR 7%

Stability 15%

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Mercury General Corp Discounted Cash Flow

Fully customizable DCF calculator online for Mercury General Corp.

Years

Calculation mode

= $18B

	0	1	2	3	4	5	6	7	8	9	10	TV
fcf	$991M	$1.1B	$1.2B	$1.3B	$1.4B	$1.5B	$1.6B	$1.8B	$1.9B	$2.1B	$2.2B	$22B
DCF		$978M	$965M	$952M	$939M	$927M	$914M	$902M	$890M	$878M	$866M	$8.7B
Value	$18B

Competitiveness and MOAT

High margins render the company resilient under dire circumstances, hence able to drive competitors out or acquire them. ROE and ROA measure the average flow generated by each invested dollar. Their marginal value is a forecast of future growth, and it is considered by Buffett and Munger the most important single indicator.

Years	12/2015	12/2016	12/2017	12/2018	12/2019	12/2020	12/2021	12/2022	12/2023	12/2024	TTM
Net Margins	2%	2%	4%	-0%	8%	10%	6%	-14%	2%	9%	9%
ROA	-	2%	4%	-0%	7%	8%	5%	-10%	1%	7%	7%
ROE	-	4%	8%	-0%	18%	18%	12%	-34%	6%	24%	24%

Net Margins (8.55%)

Net Margins are at a level that is not too high nor too low. They are not a competitive advantage but they are not a competitive disadvantage either.

Safety and Stability

Being debt the number one cause of investment losses and company death, the ratio Debt/FCF is of utmost importance to guarantee safety. On the other hand the Graham’s stability measures the drawdown of earnings, hence indicating the reliability of the flow generated by the company.

Years	12/2015	12/2016	12/2017	12/2018	12/2019	12/2020	12/2021	12/2022	12/2023	12/2024	TTM
Debt over FCF	-	-	1.16	1.05	0.78	0.66	0.81	1.26	1.38	0.58	0.58
Debt over Equity	-	-	0.21	0.23	0.21	0.18	0.18	0.26	0.37	0.3	0.3
Growth Stability	-	-	-	-6%	100%	100%	100%	-163%	100%	-	-163%

Good Debt/FCF ratio (0.58)

Net Margins are high enough to offer a good protection on the profits in case of higher costs or higher interests. Furthermore higher margins reduce earnings’ volatility.

Good Debt/Equity ratio (0.3)

The company is not overleveraged and has a good balance between equity and debt.

Bad Graham’s Stability (-163%)

The company has a bad stability in its earnings, which is a sign of a bad competitive advantage.

Growth

Growth can be dangerous when forecasting, simply projecting the current growth is in general wrong. A company passes through multiple phases, from being young and unprofitable, to the first periods of profitability and high growth, until it arrives at a period of regime with limited growth. Identifying in which phase the company is in may help forecasting.

Years	12/2015	12/2016	12/2017	12/2018	12/2019	12/2020	12/2021	12/2022	12/2023	12/2024	CAGR 5Y
Revenue YoY growth	-	7%	6%	-1%	18%	-5%	6%	-9%	27%	18%	8%
Earnings YoY growth	-	-2%	98%	-104%	-6K%	17%	-34%	-307%	-119%	386%	5%
Equity YoY growth	-	-4%	1%	-8%	11%	13%	5%	-29%	2%	26%	-4%
FCF YoY growth	-	59%	19%	10%	35%	18%	-19%	-31%	31%	138%	4%