Head-To-Head Comparison: Mercury General (NYSE:MCY) vs. Enstar Group (NYSE:ESGR)

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Mercury General (NYSE:MCY) and Enstar Group (NASDAQ:ESGR) are both mid-cap finance companies, but which is the superior business? We will compare the two companies based on the strength of their risk, institutional ownership, earnings, profitability, dividends, valuation and analyst recommendations.

Profitability

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

Net Margins Return on Equity Return on Assets
Mercury General 5.28% 7.97% 2.47%
Enstar Group 24.47% 4.49% 0.97%

Institutional & Insider Ownership

43.3% of Mercury General shares are owned by institutional investors. Comparatively, 69.7% of Enstar Group shares are owned by institutional investors. 34.2% of Mercury General shares are owned by company insiders. Comparatively, 9.4% of Enstar Group shares are owned by company insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a company is poised for long-term growth.

Earnings and Valuation

This table compares Mercury General and Enstar Group’s gross revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Mercury General $3.38 billion 0.89 -$5.72 million $1.80 30.07
Enstar Group $823.53 million 4.94 -$150.22 million N/A N/A

Mercury General has higher revenue and earnings than Enstar Group.

Analyst Ratings

This is a summary of current recommendations and price targets for Mercury General and Enstar 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
Enstar Group 0 0 0 0 N/A

Mercury General presently has a consensus target price of $69.00, suggesting a potential upside of 27.49%. Given Mercury General’s higher probable upside, equities research analysts clearly believe Mercury General is more favorable than Enstar Group.

Dividends

Mercury General pays an annual dividend of $2.51 per share and has a dividend yield of 4.6%. Enstar Group does not pay a dividend. Mercury General pays out 139.4% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Mercury General has raised its dividend for 33 consecutive years.

Volatility and Risk

Mercury General has a beta of 0.25, meaning that its stock price is 75% less volatile than the S&P 500. Comparatively, Enstar Group has a beta of 0.71, meaning that its stock price is 29% less volatile than the S&P 500.

Summary

Mercury General beats Enstar Group on 10 of the 15 factors compared between the two stocks.

About Mercury General

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 1961 and is headquartered in Los Angeles, California.

About Enstar Group

Enstar Group Limited acquires and manages insurance and reinsurance companies, and portfolios of insurance and reinsurance business in run-off. It operates in three segments: Non-Life Run-Off, Atrium, and StarStone. The Non-Life Run-Off segment engages in the running off property and casualty, and other non-life lines of businesses. It also provides consulting services, including claims inspection, claims validation, reinsurance asset collection, and IT consulting services to the insurance and reinsurance industry. The Atrium segment is involved in underwriting various classes, including marine, aviation, transit, property and casualty binding authorities, reinsurance, accident and health, and non marine direct and facultative. The StarStone segment offers a range of property, casualty, and specialty insurance products to multi-national, and small and middle-market clients. It operates in Bermuda, the United States, the United Kingdom, Continental Europe, Australia, and internationally. The company was formerly known as Castlewood Holdings Limited and changed its name to Enstar Group Limited in January 2007. Enstar Group Limited was founded in 2001 and is based in Hamilton, Bermuda.

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