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Mercury General Corporation

MCY Financial Insurance Property & Casualty

Mercury General Corporation’s revenue for fiscal 2025 (year ended December 2025) was $6.0 billion, up 9.44% from fiscal 2024.

Revenue
−12.8%
EPS
−104.9%
Free cash flow
−22.7%
Total debt
−0.94%

Quarter to September 2026, against a year earlier

89.36 13.35 −13.00%
Market cap
$5.7B
P/E
8.9×
Fwd P/E
7.0×
Dividend yield
1.23%
F-score
6/9
Altman Z
n/a
Beneish M
n/a
Dividend safety
n/a
Overview Business Profile Earnings & Analysis
Financials
Income Statement Balance Sheet Cash Flow Metrics & Ratios
Valuation Filings

Mercury General Corporation (MCY) valuation and DCF model

What the price implies · reverse DCF

At $89.36 the price implies 22.4% a year of dividend growth, at a 9.0% cost of equity.

The dividend a share grew −6.4% a year over the last ten years, −12.8% over the last five. The price asks for 28.9 points a year more than its ten-year rate. Return on equity averaged 9.2% over ten years; the price implies 14.0% for good.

In December 2017 the price assumed 6.6% a year; Mercury General Corporation went on to grow the dividend a share 15.8% a year to FY2025.

Price implies
22.4%
Last 5 years, reported
−12.8%
Last 10 years, reported
−6.4%

The headline discounts the last twelve months’ the dividend a share at 9.0% for ten years and grows it 2.5% a year after that, the same for every company, so the figure compares across the market (how a reverse DCF works).

The other way round · DCF
The price needs
22.4% a year for ten years
$89.36
today’s price
Its base case
−6.4% a year for five years, then −3.9%
$11.15
87.5% below today’s price

Both are growth in the dividend a share, discounted at 9.0%, with 2.5% a year after year ten.

Base case on its own ten-year record Mercury General Corporation’s own growth, carried forward

Its assumptions

Powerpack lets you start from a scenario and type over any of them.

The base case’s inputs, which Powerpack lets you change
1 · Dividends
the four quarters to June 2026, from the 10-Q and 10-K filings

Yearly growth in the dividend. It usually slows as the company matures.

Today’s price implies the dividend a share growing 22.4% a year for ten years.

2 · Rates

Cost of equity is the yearly return shareholders require, typically 8–11%. Terminal growth is growth forever after year 10, usually near long-run inflation, 2–3%.

3 · Per share

The model is a share’s own: no debt to take off and no shares to divide among.

Advanced inputs

Against Mercury General Corporation’s own cost of capital: risk-free 4.3% + beta 0.93 × equity premium 4.5% = 8.5% cost of equity; weighted, 8.5%.

Use 8.5%
Base case value per share $11.15 ten years discounted, and what follows
Current price $89.36 market price per share
Below today’s price 87.5% downside at the base case’s assumptions

How we got there$6.17 10 years of dividends+$4.98 terminal value=$11.15 per share

Valuation against its own history

Today’s multiple against its 5- and 10-year averages and the industry median (Insurance Property & Casualty).

Multiple Current 5Y avg 10Y avg vs 10Y avg Industry median vs industry 10Y range
P/E 8.87× 11.93× 15.64× 43% below 11.87× 25% below
P/FCF 4.85× 4.81× 5.80× 16% below 8.12× 40% below
P/B 2.03× 1.73× 1.64× 24% above 1.99× 2% above
EV/EBITDA — 6.92× 16.01× — 3.38× —
EV/Sales — 0.63× 0.74× — 3.90× —
P/E P/FCF P/B EV/EBITDA EV/Sales
9.25×20.13×31.00×41.88×10Y avg 15.64×201620172019202020212023202420252026

MCY trades at 8.87× P/E, against a 10-year average of 15.64× (range 7.71×–45.06×). That is cheaper than 63% of the last 8 year-end readings; re-rating to the average implies $157.62 per share.

Every growth rate on this page is the business’s — its cash flow, FFO or dividend — never its share price’s. A discounted-cash-flow model is only as good as its assumptions. Figures from the 10-K and 10-Q filings. Not investment advice.