MeritValue

MERCURY GENERAL CORP

MCYdata completeness 100%18 fiscal years on file
The thesis, from the filings

MERCURY GENERAL CORP earns about 9% on invested capital, barely covering its ~9% cost of capital, with a roughly flat share count. The estimate methods put fair value between $46.39 and $1,080.43 a share.Whether it’s worth owning at today’s price is the last question — and yours to answer, below.

i. The business — what you’d actually own
FigureFY 2021FY 2022FY 2023FY 2024FY 2025
Revenue$20.2M1$18.2M2$20.8M3$25.2M3$29.6M3
Net income$247.9M4−$512.7M5$96.3M6$468M6$541.1M6
Operating cash flow$501.6M7$352.6M8$453M9$1.04B9$1.09B9
Capital expenditure$41.4M10$35.5M11$36.8M12$46.1M12$58.4M12
Free cash flow (derived)$460.1M7$317.1M8$416.2M9$991M9$1.03B9
Total debt$375M13$400M14$575M15$575M16$575M17
Cash & equivalents$335.6M18$289.8M19$550.9M19$720.3M19$1.32B19
Diluted shares55.4M55.4M55.4M55.4M55.4M

Superscripts are receipts. Each links to the SEC filing the number came from (full list at the bottom).

ii. Your slice — ownership made literal
If you owned
shares
Net assets behind them
$436.42
your share of equity
Profit it earned you last year
$97.69
Free cash flow it threw off
$185.73
Debt you’d be carrying
$103.81

10 shares is a claim on $436.42 of net worth that earned you $97.69 and generated $185.73 of cash last year, against $103.81 of debt.

iii. Is this a good business?
Moat signal · return on invested capital
9% avg · 5y
FY21 12%FY22 -32%FY23 8%FY24 26%FY25 32%

It earned about 9% on invested capital against a ~9% cost of capital — roughly what it costs to fund the business, so the numbers show no clear edge.

seeing a moat in the numbers →
Management signal · capital allocation
+0% shares · 5y

Share count is roughly flat over 5 years — little dilution, little buyback. Total debt has risen 53% over the same window.

reading capital allocation →

Signals, not verdicts — read from the filings above. Numbers don’t prove a moat; they show its footprint. You decide.

iv. What it’s worth — engine v0.1.0

The 3 estimate methods that apply put fair value between $46.39 and $1,080.43 a share. They rest on different assumptions, so where they diverge is the story; the Graham Number is a stricter floor, not a target.

DCF · Growth Exit 10Y
$1,080.43
assumptions (10)
  • riskFreeRate4.7%
  • equityRiskPremium5.0%
  • beta100.0%
  • equityWeight85.0%
  • costOfDebtSpread1.5%
  • taxRate21.0%
  • terminalGrowth2.5%
  • projectionYears10
  • fcfGrowth20.0%
  • fcfBase$991M
DCF · Growth Exit 5Y
$596.69
assumptions (10)
  • riskFreeRate4.7%
  • equityRiskPremium5.0%
  • beta100.0%
  • equityWeight85.0%
  • costOfDebtSpread1.5%
  • taxRate21.0%
  • terminalGrowth2.5%
  • projectionYears5
  • fcfGrowth20.0%
  • fcfBase$991M
Earnings Power Value
$46.39
assumptions (8)
  • riskFreeRate4.7%
  • equityRiskPremium5.0%
  • beta100.0%
  • equityWeight85.0%
  • costOfDebtSpread1.5%
  • taxRate21.0%
  • normalizedEarnings$247.9M
  • growthAssumed0.0%
Graham Number
$97.95
assumptions (1)
  • grahamMultiplier2250.0%

Different models answer different questions — which to trust when →

v. The price question — last, on purpose
Is today’s price fair?
See live price ↗
Type a price. The ledger answers.
Or set your own belief
FCF growth, next 5 years20.0%
Discount rate (WACC)8.93%
Terminal growth2.5%
At your growth, a share is worth $596.69
The three cases
Bear0.0%$269
Base20.0%$596.69
Bull20.0%$596.69

Bear/base/bull growth = 0% / filed history / history + 5pp. Type a price to see the return each case implies.

Default growth 20.0%= this company’s own filed history (median-to-median FCF CAGR, clamped 0–20%). Your adjustments are recorded anonymously. They become the “what do owners actually believe” dataset.

Sources — the receipts
  1. 10-K · period ending 2021-12-31 · accession 0000064996-24-000002 (RevenueFromContractWithCustomerIncludingAssessedTax)
  2. 10-K · period ending 2022-12-31 · accession 0000064996-25-000013 (RevenueFromContractWithCustomerIncludingAssessedTax)
  3. 10-K · period ending 2023-12-31 · accession 0000064996-26-000005 (RevenueFromContractWithCustomerIncludingAssessedTax)
  4. 10-K · period ending 2021-12-31 · accession 0000064996-24-000002 (NetIncomeLoss)
  5. 10-K · period ending 2022-12-31 · accession 0000064996-25-000013 (NetIncomeLoss)
  6. 10-K · period ending 2023-12-31 · accession 0000064996-26-000005 (NetIncomeLoss)
  7. 10-K · period ending 2021-12-31 · accession 0000064996-24-000002 (NetCashProvidedByUsedInOperatingActivities)
  8. 10-K · period ending 2022-12-31 · accession 0000064996-25-000013 (NetCashProvidedByUsedInOperatingActivities)
  9. 10-K · period ending 2023-12-31 · accession 0000064996-26-000005 (NetCashProvidedByUsedInOperatingActivities)
  10. 10-K · period ending 2021-12-31 · accession 0000064996-24-000002 (PaymentsToAcquireProductiveAssets)
  11. 10-K · period ending 2022-12-31 · accession 0000064996-25-000013 (PaymentsToAcquireProductiveAssets)
  12. 10-K · period ending 2023-12-31 · accession 0000064996-26-000005 (PaymentsToAcquireProductiveAssets)
  13. 10-K · period ending 2021-12-31 · accession 0000064996-22-000004 (LongTermDebt)
  14. 10-K · period ending 2022-12-31 · accession 0000064996-23-000004 (LongTermDebt)
  15. 10-K · period ending 2023-12-31 · accession 0000064996-24-000002 (LongTermDebt)
  16. 10-K · period ending 2024-12-31 · accession 0000064996-25-000013 (LongTermDebt)
  17. 10-K · period ending 2025-12-31 · accession 0000064996-26-000005 (LongTermDebt)
  18. 10-K · period ending 2021-12-31 · accession 0000064996-25-000013 (CashCashEquivalentsRestrictedCashAndRestrictedCashEquivalents)
  19. 10-K · period ending 2022-12-31 · accession 0000064996-26-000005 (CashCashEquivalentsRestrictedCashAndRestrictedCashEquivalents)