Mercury General (NYSE: $MCY) is a small-cap stock that offers investors growth at a reasonable price.
Los Angeles-based Mercury General is an insurance company founded in 1961. Today, the company boasts 4,400 employees and annual revenue of $6 billion U.S.
The company has been publicly traded since 1985 and its share price has risen sharply in recent years, countering a downtrend among insurance equities.
Mercury General specializes in automobile and homeowners’ insurance, each of which is essential and required in most jurisdictions. That specialization has helped the stock.
Over the last 12 months, MCY stock has gained 68%, including a 17% increase this year.
Since October 2023, the stock is up more than 300%.
Despite the bull run, Mercury General’s stock remains cheap trading at seven times earnings estimates. The average price-earnings ratio among the S&P 500 constituent stocks is 22.7.
The company also pays a quarterly dividend of $0.32 U.S. per share, giving it a yield of 1.18%. Mercury has paid a dividend consistently for 40 years.
Mercury General currently has a market capitalization of $5.95 billion U.S., placing it in the small-cap camp.
The company’s earnings have been strong in recent quarters and Wall Street expects more of the same when the insurer next reports results in August.
Investors looking to diversify their portfolio might want to consider this small-cap gem.
