Reviewing Mercury General (NYSE:MCY) and American Coastal Insurance (NASDAQ:ACIC)

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

Insider & Institutional Ownership

42.4% of Mercury General shares are owned by institutional investors. Comparatively, 22.1% of American Coastal Insurance shares are owned by institutional investors. 35.5% of Mercury General shares are owned by company insiders. Comparatively, 49.9% of American Coastal Insurance shares are owned by company insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a stock is poised for long-term growth.

Volatility & Risk

Mercury General has a beta of 0.96, indicating that its share price is 4% less volatile than the S&P 500. Comparatively, American Coastal Insurance has a beta of -0.26, indicating that its share price is 126% less volatile than the S&P 500.

Profitability

This table compares Mercury General and American Coastal Insurance’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Mercury General	6.76%	16.61%	3.65%
American Coastal Insurance	25.26%	30.65%	6.60%

Valuation & Earnings

This table compares Mercury General and American Coastal Insurance”s top-line revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Mercury General	$5.48 billion	0.77	$467.95 million	$7.04	10.87
American Coastal Insurance	$296.66 million	1.79	$75.72 million	$1.63	6.67

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

Analyst Ratings

This is a summary of recent recommendations and price targets for Mercury General and American Coastal Insurance, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Mercury General	0	0	0	1	4.00
American Coastal Insurance	0	0	0	0	0.00

Mercury General presently has a consensus price target of $90.00, indicating a potential upside of 17.65%. Given Mercury General’s stronger consensus rating and higher possible upside, equities analysts clearly believe Mercury General is more favorable than American Coastal Insurance.

Summary

Mercury General beats American Coastal Insurance on 9 of the 14 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, and umbrella insurance products. Its automobile insurance products include collision, property damage, bodily injury, comprehensive, personal injury protection, underinsured and uninsured motorist, and other hazards; and homeowners insurance products comprise dwelling, liability, personal property, and other coverages. The company sells its policies through a network of independent agents, insurance agencies, as well as directly through internet sales portals 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 American Coastal Insurance

American Coastal Insurance Corporation operates as a property and casualty insurance holding company that sources, writes, and services residential personal and commercial property, and casualty insurance policies in the United States. The company offers structure, content, and liability coverage for standard single-family homeowners, renters, and condominium unit owners. It also provides commercial multi-peril property insurance for residential condominium associations and apartments, as well as loss or damage to buildings, inventory, and equipment caused by fire, wind, hail, water, theft, and vandalism. In addition, the company offers equipment breakdown, identity theft, cyber security, and flood policies. The company markets and distributes its products through a network of independent agencies. The company was formerly known as United Insurance Holdings Corp. and changed its name to American Coastal Insurance Corporation in August 2023. American Coastal Insurance Corporation was founded in 1999 and is headquartered in Saint Petersburg, Florida.