Latest news with #MercuryGeneral
Yahoo
10-04-2025
- Business
- Yahoo
Mercury General (NYSE:MCY) sheds 5.9% this week, as yearly returns fall more in line with earnings growth
While Mercury General Corporation (NYSE:MCY) shareholders are probably generally happy, the stock hasn't had particularly good run recently, with the share price falling 13% in the last quarter. On the bright side the share price is up over the last half decade. In that time, it is up 32%, which isn't bad, but is below the market return of 107%. Although Mercury General has shed US$184m from its market cap this week, let's take a look at its longer term fundamental trends and see if they've driven returns. AI is about to change healthcare. These 20 stocks are working on everything from early diagnostics to drug discovery. The best part - they are all under $10bn in marketcap - there is still time to get in early. To quote Buffett, 'Ships will sail around the world but the Flat Earth Society will flourish. There will continue to be wide discrepancies between price and value in the marketplace...' By comparing earnings per share (EPS) and share price changes over time, we can get a feel for how investor attitudes to a company have morphed over time. During five years of share price growth, Mercury General achieved compound earnings per share (EPS) growth of 7.9% per year. This EPS growth is higher than the 6% average annual increase in the share price. So it seems the market isn't so enthusiastic about the stock these days. The reasonably low P/E ratio of 6.28 also suggests market apprehension. The company's earnings per share (over time) is depicted in the image below (click to see the exact numbers). It's probably worth noting that the CEO is paid less than the median at similar sized companies. But while CEO remuneration is always worth checking, the really important question is whether the company can grow earnings going forward. Dive deeper into the earnings by checking this interactive graph of Mercury General's earnings, revenue and cash flow . When looking at investment returns, it is important to consider the difference between total shareholder return (TSR) and share price return. The TSR incorporates the value of any spin-offs or discounted capital raisings, along with any dividends, based on the assumption that the dividends are reinvested. So for companies that pay a generous dividend, the TSR is often a lot higher than the share price return. We note that for Mercury General the TSR over the last 5 years was 61%, which is better than the share price return mentioned above. This is largely a result of its dividend payments! Mercury General's TSR for the year was broadly in line with the market average, at 5.7%. We should note here that the five-year TSR is more impressive, at 10% per year. Although the share price growth has slowed, the longer term story points to a business well worth watching. While it is well worth considering the different impacts that market conditions can have on the share price, there are other factors that are even more important. To that end, you should learn about the 2 warning signs we've spotted with Mercury General (including 1 which makes us a bit uncomfortable) . For those who like to find winning investments this free list of undervalued companies with recent insider purchasing, could be just the ticket. Please note, the market returns quoted in this article reflect the market weighted average returns of stocks that currently trade on American exchanges. Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.
Yahoo
27-02-2025
- Business
- Yahoo
2 insurance companies received approval to raise rates
State regulators have given two insurance companies the approval to raise rates for thousands of customers across California. Beginning in late March, homeowners, condo owners and dwelling rental policyholders with Mercury General, the fifth-largest home insurer in the state, will see rates raised by 12% on average. About 579,300 customers will be impacted. California Insurance Commissioner meets with State Farm regarding rate hike request Additionally, customers who have home insurance with Safeco, a subsidiary of the fourth-largest insurer Liberty Mutual, will see rates rise by an average of 7.2% in May. About 86,700 customers are affected. Liberty Mutual's rate hike won't impact condo owners or renters since the company announced last year plans to exit the condo and renters' insurance markets in 2026 as it seeks 'a sustainable business path forward in California.' Customers at either insurer can expect the rate hike to impact their individual premiums on their next renewal following the rate's effective date. Can California's broken homeowners insurance system be fixed? According to filings with the California Department of Insurance, both companies also submitted rate hike requests in June, months before the recent deadly and destructive wildfires in Southern California. According to the Department of Insurance, insurers, including the FAIR Plan, had paid $6.9 billion in wildfire claims as of Feb. 5. The FAIR Plan is California's plan that provides insurance to homeowners who can't get private coverage. Copyright 2025 Nexstar Media, Inc. All rights reserved. This material may not be published, broadcast, rewritten, or redistributed.
Yahoo
13-02-2025
- Business
- Yahoo
With EPS Growth And More, Mercury General (NYSE:MCY) Makes An Interesting Case
For beginners, it can seem like a good idea (and an exciting prospect) to buy a company that tells a good story to investors, even if it currently lacks a track record of revenue and profit. Sometimes these stories can cloud the minds of investors, leading them to invest with their emotions rather than on the merit of good company fundamentals. A loss-making company is yet to prove itself with profit, and eventually the inflow of external capital may dry up. So if this idea of high risk and high reward doesn't suit, you might be more interested in profitable, growing companies, like Mercury General (NYSE:MCY). While profit isn't the sole metric that should be considered when investing, it's worth recognising businesses that can consistently produce it. See our latest analysis for Mercury General Generally, companies experiencing growth in earnings per share (EPS) should see similar trends in share price. Therefore, there are plenty of investors who like to buy shares in companies that are growing EPS. Impressively, Mercury General has grown EPS by 24% per year, compound, in the last three years. If the company can sustain that sort of growth, we'd expect shareholders to come away satisfied. Top-line growth is a great indicator that growth is sustainable, and combined with a high earnings before interest and taxation (EBIT) margin, it's a great way for a company to maintain a competitive advantage in the market. Our analysis has highlighted that Mercury General's revenue from operations did not account for all of their revenue last year, so our analysis of its margins might not accurately reflect the underlying business. The music to the ears of Mercury General shareholders is that EBIT margins have grown from 2.7% to 11% in the last 12 months and revenues are on an upwards trend as well. Ticking those two boxes is a good sign of growth, in our book. The chart below shows how the company's bottom and top lines have progressed over time. Click on the chart to see the exact numbers. While it's always good to see growing profits, you should always remember that a weak balance sheet could come back to bite. So check Mercury General's balance sheet strength, before getting too excited. Many consider high insider ownership to be a strong sign of alignment between the leaders of a company and the ordinary shareholders. So we're pleased to report that Mercury General insiders own a meaningful share of the business. In fact, they own 52% of the company, so they will share in the same delights and challenges experienced by the ordinary shareholders. Intuition will tell you this is a good sign because it suggests they will be incentivised to build value for shareholders over the long term. At the current share price, that insider holding is worth a staggering US$1.4b. That level of investment from insiders is nothing to sneeze at. While it's always good to see some strong conviction in the company from insiders through heavy investment, it's also important for shareholders to ask if management compensation policies are reasonable. Our quick analysis into CEO remuneration would seem to indicate they are. The median total compensation for CEOs of companies similar in size to Mercury General, with market caps between US$2.0b and US$6.4b, is around US$6.6m. The CEO of Mercury General only received US$1.7m in total compensation for the year ending December 2023. That's clearly well below average, so at a glance that arrangement seems generous to shareholders and points to a modest remuneration culture. While the level of CEO compensation shouldn't be the biggest factor in how the company is viewed, modest remuneration is a positive, because it suggests that the board keeps shareholder interests in mind. Generally, arguments can be made that reasonable pay levels attest to good decision-making. If you believe that share price follows earnings per share you should definitely be delving further into Mercury General's strong EPS growth. If you need more convincing beyond that EPS growth rate, don't forget about the reasonable remuneration and the high insider ownership. The overarching message here is that Mercury General has underlying strengths that make it worth a look at. Before you take the next step you should know about the 2 warning signs for Mercury General (1 shouldn't be ignored!) that we have uncovered. While opting for stocks without growing earnings and absent insider buying can yield results, for investors valuing these key metrics, here is a carefully selected list of companies in the US with promising growth potential and insider confidence. Please note the insider transactions discussed in this article refer to reportable transactions in the relevant jurisdiction. Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned. Sign in to access your portfolio
