Lemonade, Inc. (LMND) vs Mercury General Corporation (MCY)

Lemonade, Inc. and Mercury General Corporation are both Insurance Property & Casualty companies. Mercury General Corporation is the larger, with a market value of $5.4B against $3.5B — 1.5× the size. Lemonade, Inc. has negative trailing earnings, so its P/E is not meaningful; Mercury General Corporation trades at 5.9×. Lemonade, Inc. grew revenue faster over the last twelve months: 62.3% against 9.95%. Mercury General Corporation has the higher net margin (14.8% vs −14.2%) and the higher return on invested capital (35.8% vs −25.6%). Across the 20 metrics below, Mercury General Corporation leads on 15 and Lemonade, Inc. on 5.

Valuation

Metric LMND MCY Insurance Property & Casualty median
P/E n/m 5.88 10.29
P/S 3.55 0.87 1.17
P/B 6.92 1.94 1.83
Price to free cash flow 427.02 4.28 7.48
EV/EBITDA n/m 3.73 7.49
EV/Sales 3.37 0.75 1.13
Earnings yield (4.07%) 17.02% 9.50%
Free cash flow yield 0.23% 23.34% 13.29%

Profitability

Metric LMND MCY Insurance Property & Casualty median
Gross margin 51.65% 26.12% 41.16%
Operating margin (13.67%) 18.78% 15.09%
Net margin (14.19%) 14.77% 11.51%
Free cash flow margin 0.83% 20.26% 17.59%
Return on equity (26.96%) 38.99% 18.19%
Return on assets (7.01%) 9.55% 3.74%
Return on invested capital (25.59%) 35.81% 12.06%

Growth

Metric LMND MCY Insurance Property & Casualty median
Revenue growth (TTM) 62.31% 9.95% 8.69%
EPS growth (last fiscal year) 21.40% 15.62% —
Revenue growth, 5-year CAGR 50.87% 9.63% 9.23%
Net income growth, 5-year CAGR 0.00% 7.63% 10.09%

Health

Metric LMND MCY Insurance Property & Casualty median
Debt to equity 0.41 0.33 0.25
Current ratio 0.81 0.42 0.42
Net debt to EBITDA 1.58 (0.97) 0.08

Dividend

Metric LMND MCY Insurance Property & Casualty median
Dividend yield — 3.17% 2.79%
Payout ratio 0.00 0.57 0.27

Size

Metric LMND MCY Insurance Property & Casualty median
Market cap 3.53b 5.44b 2.44b

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