Mercury General Corporation Stock Upgraded (MCY)

NEW YORK ( TheStreet) -- Mercury General Corporation (NYSE: MCY) has been upgraded by TheStreet Ratings from hold to buy. The company's strengths can be seen in multiple areas, such as its increase in net income, revenue growth, largely solid financial position with reasonable debt levels by most measures, attractive valuation levels and good cash flow from operations. We feel these strengths outweigh the fact that the company has had lackluster performance in the stock itself.

Highlights from the ratings report include:
  • The net income growth from the same quarter one year ago has significantly exceeded that of the S&P 500 and the Insurance industry. The net income increased by 221.3% when compared to the same quarter one year prior, rising from $17.82 million to $57.25 million.
  • MCY's revenue growth trails the industry average of 20.7%. Since the same quarter one year prior, revenues slightly increased by 8.1%. Growth in the company's revenue appears to have helped boost the earnings per share.
  • MCY's debt-to-equity ratio is very low at 0.14 and is currently below that of the industry average, implying that there has been very successful management of debt levels.
  • Net operating cash flow has significantly increased by 199.96% to $57.48 million when compared to the same quarter last year. In addition, MERCURY GENERAL CORP has also vastly surpassed the industry average cash flow growth rate of 82.67%.

Mercury General Corporation, together with its subsidiaries, engages in writing private passenger and commercial automobile insurance in the United States. The company also writes homeowners, mechanical breakdown, fire, umbrella, and commercial automobile and property insurance. The company has a P/E ratio of 11.7, equal to the average insurance industry P/E ratio and below the S&P 500 P/E ratio of 17.7. Mercury General has a market cap of $2.2 billion and is part of the financial sector and insurance industry. Shares are down 6.1% year to date as of the close of trading on Friday.

You can view the full Mercury General Ratings Report or get investment ideas from our investment research center.

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