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Mercury General Corporation (MCY): Dividend Is Coming In 3 Days, Should You Buy?

Investors who want to cash in on Mercury General Corporation’s (NYSE:MCY) upcoming dividend of $0.63 per share have only 3 days left to buy the shares before its ex-dividend date, 13 December 2017, in time for dividends payable on the 28 December 2017. What does this mean for current shareholders and potential investors? Below, I will explain how holding MCY can impact your portfolio income stream, by analysing the stock’s most recent financial data and dividend attributes. Check out our latest analysis for Mercury General

5 questions I ask before picking a dividend stock

If you are a dividend investor, you should always assess these five key metrics:

  • Is it the top 25% annual dividend yield payer?

  • Has it paid dividend every year without dramatically reducing payout in the past?

  • Has the amount of dividend per share grown over the past?

  • Does earnings amply cover its dividend payments?

  • Will it have the ability to keep paying its dividends going forward?

NYSE:MCY Historical Dividend Yield Dec 10th 17
NYSE:MCY Historical Dividend Yield Dec 10th 17

Does Mercury General pass our checks?

The company currently pays out 139.07% of its earnings as a dividend, meaning the dividend is not sufficiently covered by its earnings. Going forward, analysts expect MCY’s payout to reduce to 91.64% of its earnings, which leads to a dividend yield of around 4.65%. However, EPS should increase to $2.63, meaning that the lower payout ratio does not necessarily implicate a lower dividend payment. If there’s one type of stock you want to be reliable, it’s dividend stocks and their stable income-generating ability. MCY has increased its DPS from $2.08 to $2.5 in the past 10 years. During this period it has not missed a payment, as one would expect for a company increasing its dividend. This is an impressive feat, which makes MCY a true dividend rockstar. Compared to its peers, MCY generates a yield of 4.67%, which is high for insurance stocks.

What this means for you:

Are you a shareholder?

Are you a shareholder? Investors of Mercury General can continue to expect strong dividends from the stock moving forward. With its favorable dividend characteristics, MCY is one worth keeping around in your income portfolio. However, depending on your current holdings, it may be worth exploring other dividend stocks to increase diversification, or even look at high-growth stocks to complement your steady income stocks. I suggest continuing your research by checking out my interactive free list of dividend rockstars as well as high-growth stocks to potentially add to your holdings.

Are you a potential investor? Keeping in mind the dividend characteristics above, MCY is definitely worth considering for investors looking to build a dedicated income portfolio. As with all investments, you should always research extensively before deciding whether or not a stock is an appropriate investment for you. I always recommend analysing the company’s fundamentals and underlying business before making an investment decision. No matter how much of a cash cow Mercury General is, it is not worth an infinite price. Can you still benefit from a mispricing of the stock? Check our latest free analysis to find out!


To help readers see pass the short term volatility of the financial market, we aim to bring you a long-term focused research analysis purely driven by fundamental data. Note that our analysis does not factor in the latest price sensitive company announcements.

The author is an independent contributor and at the time of publication had no position in the stocks mentioned.

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