Mercury General (MCY) and HCI Group (HCI) Head to Head Analysis

Mercury General (NYSE:MCY) and HCI Group (NYSE:HCI) are both finance companies, but which is the better stock? We will compare the two companies based on the strength of their institutional ownership, risk, valuation, profitability, earnings, analyst recommendations and dividends.

Insider & Institutional Ownership

48.9% of Mercury General shares are owned by institutional investors. Comparatively, 67.5% of HCI Group shares are owned by institutional investors. 34.2% of Mercury General shares are owned by insiders. Comparatively, 22.3% of HCI Group shares are owned by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a stock will outperform the market over the long term.

Analyst Ratings

This is a breakdown of recent ratings and recommmendations for Mercury General and HCI Group, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Mercury General 0 0 1 0 3.00
HCI Group 1 0 1 0 2.00

Mercury General presently has a consensus price target of $69.00, suggesting a potential upside of 26.86%. HCI Group has a consensus price target of $50.00, suggesting a potential upside of 4.71%. Given Mercury General’s stronger consensus rating and higher probable upside, research analysts plainly believe Mercury General is more favorable than HCI Group.

Profitability

This table compares Mercury General and HCI Group’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Mercury General 2.80% 7.13% 2.37%
HCI Group 15.96% 21.65% 5.09%

Volatility & Risk

Mercury General has a beta of 0.22, indicating that its stock price is 78% less volatile than the S&P 500. Comparatively, HCI Group has a beta of 0.95, indicating that its stock price is 5% less volatile than the S&P 500.

Dividends

Mercury General pays an annual dividend of $2.51 per share and has a dividend yield of 4.6%. HCI Group pays an annual dividend of $1.50 per share and has a dividend yield of 3.1%. Mercury General pays out 153.0% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. HCI Group pays out -200.0% of its earnings in the form of a dividend. Mercury General has raised its dividend for 33 consecutive years and HCI Group has raised its dividend for 5 consecutive years. Mercury General is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Valuation & Earnings

This table compares Mercury General and HCI Group’s revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Mercury General $3.42 billion 0.88 $144.87 million $1.64 33.16
HCI Group $244.41 million 1.79 -$6.89 million ($0.75) -63.67

Mercury General has higher revenue and earnings than HCI Group. HCI Group is trading at a lower price-to-earnings ratio than Mercury General, indicating that it is currently the more affordable of the two stocks.

Summary

Mercury General beats HCI Group on 9 of the 16 factors compared between the two stocks.

Mercury General Company Profile

Mercury General Corporation, together with its subsidiaries, engages in writing personal automobile insurance in the United States. The company also writes homeowners, commercial automobile, commercial property, mechanical protection, fire, and umbrella insurance. Its automobile insurance products cover collision, property damage, bodily injury, comprehensive, personal injury protection, underinsured and uninsured motorist, and other hazards; and homeowners insurance products cover dwelling, liability, personal property, fire, and other hazards. The company sells its policies through a network of independent agents, 100% owned insurance agents, and direct channels in Arizona, California, Florida, Georgia, Illinois, Nevada, New Jersey, New York, Oklahoma, Texas, and Virginia. Mercury General Corporation was founded in 1960 and is headquartered in Los Angeles, California.

HCI Group Company Profile

HCI Group, Inc. primarily engages in the property and casualty insurance business in Florida. It provides property and casualty insurance to homeowners, condominium owners, and tenants; and reinsurance. The company also owns and operates one full-service restaurant, two marinas, two retail shopping centers, and one office building. In addition, it offers designs and develops Web-based applications and products for mobile devices. The company was formerly known as Homeowners Choice, Inc. and changed its name to HCI Group, Inc. in May 2013. HCI Group, Inc. was incorporated in 2006 and is headquartered in Tampa, Florida.

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