Fact based stock research
Mercury General (NYSE:MCY)

US5894001008

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For every stock, we judge its performance against its peers and rank it on a scale of 1 to 100. The higher the rank, the better the stock performs than its peers. And, we do this for six investment strategies:
Value - shows how good of a value the stock is. Green is "inexpensive"; red is "expensive".

Growth - shows a company's growth potential. Green is "high growth" expected; red is "tough times ahead".

Safety - relates to the amount of debt a company has. Green is low debt level; red is high debt level.

Combined Financial - this isn't an average of the first three ranks but rather a consolidated view across several financial indicators. Green = good; red = tread carefully.

(NEW) Sentiment - quantifies professional analyst ratings and holdings as well as market pulse. Green = positive sentiment; red = skepticism (Only available to Premium Subscribers).

(NEW) 360° View - the ultimate rating with all financial and non-financial indicators.

Mercury General stock research in summary

mercuryinsurance.com

ANALYSIS: With an Obermatt Combined Rank of 50 (better than 50% compared with investment alternatives), Mercury General (Property & Casualty Insurance, USA) shares have above-average financial characteristics compared with similar stocks. Shares of Mercury General are low in value (priced high) with a consolidated Value Rank of 49 (worse than 51% of alternatives) and show below-average growth (Growth Rank of 47) but are safely financed (Safety Rank of 98), which means low debt burdens. ...read more

RECOMMENDATION: A Combined Rank of 50, is a buy recommendation based on Mercury General's financial characteristics. As the company Mercury General's critical financial metrics exhibit below-average performance, such as low value (Obermatt Value Rank of 49) and low growth (Obermatt Growth Rank of 47), it is a somewhat questionable stock investment, where the risk of paying too much for the shares is significant, unless the company has an exceptionally bright future. In this case, good financing practices (Obermatt Safety Rank of 98) are a positive sign, because it may allow the company to weather challenging times until the hoped-for cash flows materialize. This may be true for high-tech or biotechnology companies with enough cash to sustain prolonged business development. If they own properties that only provide cash flows in the future, the stock may look excessively expensive and unattractive today. In such cases, the Obermatt Method has limited value, as it is based on facts we can observe today. If the facts lie all in the future, stock investing becomes guesswork, and this should only be a driver in a limited number of investments that account for a small fraction of a safe portfolio. Obermatt Premium subscribers can further check the stock’s Sentiment Ranks, which also flow into the Obermatt 360° View for investors. ...read more

Latest Obermatt Ranks


360° View^new
Sentiment Rank^new
Value Rank	49
Growth Rank	47
Safety Rank	98
Combined Rank	50

Country	USA
Industry	Property & Casualty Insurance
Index	Dividends USA, D.J. US Insurance, S&P MIDCAP
Size class	X-Large

This stock has achievements: Top 10 Stock.

14-Nov-2024. Stock data may be delayed. Log in or sign up to get the most recent research.

Further information

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Review the performance ranks of the individual metrics that form each investment strategy.

Research History: Mercury General

RESEARCH HISTORY	2021	2022	2023	2024
VALUE
VALUE	64	49	68	49
GROWTH
GROWTH	70	29	49	47
SAFETY
SAFETY	48	98	98	98
SENTIMENT
SENTIMENT	n/a	11	30	^new
360° VIEW
360° VIEW	n/a	7	32	^new

Most recent update of the stock research: 14-Nov-2024. Financial reporting date used for calculating ranks: 30-Jun-2024. Stock research history is based on the Obermatt Method. The higher the rank, the better Mercury General is in the corresponding investment strategy.
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Combined financial peformance in Detail

RESEARCH HISTORY	2021	2022	2023	2024
VALUE
VALUE	64	49	68	49
GROWTH
GROWTH	70	29	49	47
SAFETY
SAFETY	48	98	98	98
COMBINED
COMBINED	70	50	50	50

Last update of combined financial performance: 6-Oct-2022. Stock analysis on combined financial performance: The higher the rank of Mercury General the better the performance.

Value Metrics in Detail

ANALYSIS: With an Obermatt Value Rank of 49 (worse than 51% compared with alternatives), Mercury General shares are more expensive than the average comparable stock. The Value Rank is based on consolidating four value indicators, where the majority of metrics are below, and only one is above average for Mercury General. Price-to-Sales (P/S) is 89, which means that the stock price compared with what market professionals expect for future sales is lower than 89% of comparable companies, indicating a good value concerning to Mercury General's revenue size. But all other performance indicators point in a different direction. Dividend yields have a Dividend Yield rank of 49, meaning that dividends are expected to be lower than for 51% of comparable investments. Furthermore, Price-to-Book Capital (also referred to as market-to-book ratio) is less favorable than 67% of alternatives (only 33% of peers have an even higher ratio). The same is valid for Price-to-Profit (or Price / Earnings, P/E), which is higher than for 51% of comparable companies, making the stock more expensive compared with the company's expected profit levels. ...read more

RECOMMENDATION: The overall picture with a consolidated Value Rank of 49, is a hold recommendation based on Mercury General's stock price compared with the company's operational size and dividend yields. Since Price-to-Sales is a stable value indicator even in challenging times, investing in Mercury General could be seen as a value investment. However, there must be a good reason for the low market-to-book rank. If the company has a typical capital investment practice, the stock may be overvalued because the profit and dividend-related performance indicators are also low. The stock is only good value if investors can expect profits and dividends to pick up in the future. Else, Mercury General looks like an expensive investment today. We recommend further analyzing the stock with Obermatt’s Value, Safety, and Sentiment Ranks, including the 360° View, before making an investment decision, which is especially important in this case, as the financial indicators are inconclusive. ...read more

VALUE METRICS	2021	2022	2023	2024
PRICE VS. REVENUES (P/S)
PRICE VS. REVENUES (P/S)	56	52	91	89
PRICE VS. PROFITS (P/E)
PRICE VS. PROFITS (P/E)	73	26	18	49
PRICE VS. CAPITAL (Market-to-Book)
PRICE VS. CAPITAL (Market-to-Book)	35	44	53	33
DIVIDEND YIELD
DIVIDEND YIELD	82	81	82	49
CONSOLIDATED RANK: VALUE
CONSOLIDATED RANK: VALUE	64	49	68	49

Last update of Value Rank: 14-Nov-2024. Stock analysis on value ratios: The higher the rank, the lower the value ratio of Mercury General; except for dividend yield where the rank is higher, the higher the yield.

Growth Metrics in Detail

ANALYSIS: With an Obermatt Growth Rank of 47 (better than 47% compared with alternatives), Mercury General shows a below-average growth dynamic in its industry. There is limited momentum in this company. The Growth Rank is based on consolidating four value indicators, with three out of four indicators below average for Mercury General. Sales Growth has a below market rank of 45, which means that, currently, professionals expect the company to grow less than 55% of its competitors. The same is valid for Capital Growth, with a rank of 27, and Profit Growth, with a rank of 15. Currently, professionals expect the company to grow its profits less than 85% of its competitors). Only shareholders are optimistic. Stock Returns are above average at a rank of 97, which means that the stock returns have recently been above 97% of alternative investments. ...read more

RECOMMENDATION: The overall picture with a consolidated Growth Rank of 47, is a hold recommendation for growth and momentum investors. That picture may be the result for a company that has reached the bottom. All went south for Mercury General, and it still looks bad, but some investors already see light at the end of the tunnel, rewarding the stock with recent above-market stock returns. It could also mean that investors are correcting an overreaction to negative news. If that were the case, the positive stock returns are not yet a sign of recovery. Investors should look closely at the Value and Sentiment indicators before they make a stock purchasing decision, because growth is unlikely to be the driving argument behind this investment. While momentum is a popular investment factor, the value aspect might be the more important one, in the longer term. We recommend analyzing the stock with Obermatt’s Value, Safety, and Sentiment Ranks to arrive at a 360° View of the stock purchase case, especially since the growth performance is low here. ...read more

GROWTH METRICS	2021	2022	2023	2024
REVENUE GROWTH
REVENUE GROWTH	53	39	82	45
PROFIT GROWTH
PROFIT GROWTH	22	57	6	15
CAPITAL GROWTH
CAPITAL GROWTH	n/a	57	37	27
STOCK RETURNS
STOCK RETURNS	71	25	57	97
CONSOLIDATED RANK: GROWTH
CONSOLIDATED RANK: GROWTH	70	29	49	47

Last update of Growth Rank: 14-Nov-2024. Stock analysis on growth metrics: The higher the rank, the higher the growth and returns of Mercury General.

Safety Metrics in Detail

ANALYSIS: With an Obermatt Safety Rank of 98 (better than 98% compared with alternatives) for 2022, the company Mercury General has safe financing practices, which means that their overall debt burden is low. This doesn't mean that the business of Mercury General is safe, it only means that the company is on the safer side regarding possible bankruptcy, assuming that public reporting is correct. The Safety Rank is based on consolidating three financing indicators, with two out of three indicators above average for Mercury General. Leverage is at a rank of 52, meaning the company has a below-average debt-to-equity ratio. It has less debt than 52% of its competitors. Liquidity is also good at a rank of 80, meaning the company generates more profit to service its debt than 80% of its competitors. This indicates that the company is on the safer side when it comes to debt service. But Refinancing is lower at a rank of 8, which means that the portion of the debt that is about to be refinanced is above-average. It has more debt in the refinancing stage than 92% of its competitors. ...read more

RECOMMENDATION: With a consolidated Safety Rank of 98 (better than 98% compared with alternatives), Mercury General has a financing structure that is significantly safer than that of its competitors. The refinancing issues could be a short-term problem, especially if the company has reputation issues. Banks and investors don't like to refinance debt if there are clouds on the horizon. For this reason, investors should look at the refinancing environment for Mercury General. Does it look safe that debt that is coming due can be covered with new debt? If that is the case, then the financing situation of the company is on the safer side. If not, it may be better to wait until refinancing has been completed and the Refinancing rank is good again. Investors may have a short-term debt challenge with Mercury General and should also compare Obermatt’s Value, Growth, and Sentiment Ranks before making a decision. ...read more

SAFETY METRICS	2021	2022	2023	2024
LEVERAGE
LEVERAGE	67	78	75	52
REFINANCING
REFINANCING	10	8	8	8
LIQUIDITY
LIQUIDITY	74	92	16	80
CONSOLIDATED RANK: SAFETY
CONSOLIDATED RANK: SAFETY	48	98	98	98

Last update of Safety Rank: 6-Oct-2022. Stock analysis on safety metrics: The higher the rank, the lower the leverage of Mercury General and the more cash is available to service its debt.

Sentiment Metrics in Detail

SENTIMENT	2021	2022	2023	2024
ANALYST OPINIONS
ANALYST OPINIONS	n/a	2	51	^new
OPINIONS CHANGE
OPINIONS CHANGE	n/a	50	50	^new
PRO HOLDINGS
PRO HOLDINGS	n/a	63	52	^new
MARKET PULSE
MARKET PULSE	n/a	16	7	^new
CONSOLIDATED RANK: SENTIMENT
CONSOLIDATED RANK: SENTIMENT	n/a	11	30	^new

Last update of Sentiment Rank: 14-Nov-2024. Stock analysis on sentiment metrics: The higher the rank, the more positive the sentiment for Mercury General.
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