ALLETE INC (ALE) Stock Fundamental Analysis
NYSE:ALE - New York Stock Exchange, Inc. - US0185223007 - Common Stock - Currency: USD
Overall ALE gets a fundamental rating of 4 out of 10. We evaluated ALE against 47 industry peers in the Electric Utilities industry. ALE has an average financial health and profitability rating. ALE is valued correctly, but it does not seem to be growing. Finally ALE also has an excellent dividend rating.
1. Profitability
1.1 Basic Checks
ALE had positive earnings in the past year.
In the past year ALE had a positive cash flow from operations.
ALE had positive earnings in each of the past 5 years.
In the past 5 years ALE always reported a positive cash flow from operatings.
1.2 Ratios
ALE has a Return On Assets (2.69%) which is in line with its industry peers.
The Return On Equity of ALE (6.44%) is worse than 89.36% of its industry peers.
ALE has a Return On Invested Capital of 2.34%. This is amonst the worse of the industry: ALE underperforms 91.49% of its industry peers.
ALE had an Average Return On Invested Capital over the past 3 years of 2.33%. This is significantly below the industry average of 38.54%.
The 3 year average ROIC (2.33%) for ALE is below the current ROIC(2.34%), indicating increased profibility in the last year.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 2.69% | ||
| ROE | 6.44% | ||
| ROIC | 2.34% |
ROA(3y)3.04%
ROA(5y)2.9%
ROE(3y)7.37%
ROE(5y)7.27%
ROIC(3y)2.33%
ROIC(5y)2.36%
1.3 Margins
ALE's Profit Margin of 12.10% is in line compared to the rest of the industry. ALE outperforms 42.55% of its industry peers.
In the last couple of years the Profit Margin of ALE has declined.
Looking at the Operating Margin, with a value of 10.86%, ALE is doing worse than 85.11% of the companies in the same industry.
ALE's Operating Margin has declined in the last couple of years.
ALE has a Gross Margin of 91.50%. This is amongst the best in the industry. ALE outperforms 95.74% of its industry peers.
ALE's Gross Margin has been stable in the last couple of years.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 10.86% | ||
| PM (TTM) | 12.1% | ||
| GM | 91.5% |
OM growth 3Y-0.62%
OM growth 5Y-6.31%
PM growth 3Y-0.57%
PM growth 5Y-4.77%
GM growth 3Y-1.28%
GM growth 5Y-0.42%
2. Health
2.1 Basic Checks
ALE has a Return on Invested Capital (ROIC), which is below the Cost of Capital (WACC), which means it is destroying value.
The number of shares outstanding for ALE has been increased compared to 1 year ago.
The number of shares outstanding for ALE has been increased compared to 5 years ago.
Compared to 1 year ago, ALE has an improved debt to assets ratio.
2.2 Solvency
ALE has an Altman-Z score of 1.10. This is a bad value and indicates that ALE is not financially healthy and even has some risk of bankruptcy.
With a decent Altman-Z score value of 1.10, ALE is doing good in the industry, outperforming 68.09% of the companies in the same industry.
The Debt to FCF ratio of ALE is 32.94, which is on the high side as it means it would take ALE, 32.94 years of fcf income to pay off all of its debts.
Looking at the Debt to FCF ratio, with a value of 32.94, ALE is in the better half of the industry, outperforming 74.47% of the companies in the same industry.
ALE has a Debt/Equity ratio of 0.64. This is a neutral value indicating ALE is somewhat dependend on debt financing.
Looking at the Debt to Equity ratio, with a value of 0.64, ALE is in the better half of the industry, outperforming 70.21% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.64 | ||
| Debt/FCF | 32.94 | ||
| Altman-Z | 1.1 |
ROIC/WACC0.32
WACC7.32%
2.3 Liquidity
ALE has a Current Ratio of 1.26. This is a normal value and indicates that ALE is financially healthy and should not expect problems in meeting its short term obligations.
Looking at the Current ratio, with a value of 1.26, ALE is in the better half of the industry, outperforming 72.34% of the companies in the same industry.
A Quick Ratio of 0.81 indicates that ALE may have some problems paying its short term obligations.
ALE has a Quick ratio (0.81) which is in line with its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 1.26 | ||
| Quick Ratio | 0.81 |
3. Growth
3.1 Past
The earnings per share for ALE have decreased strongly by -23.32% in the last year.
ALE shows a decrease in Earnings Per Share. Measured over the last years, the EPS has been decreasing by -2.89% yearly.
Looking at the last year, ALE shows a very negative growth in Revenue. The Revenue has decreased by -11.15% in the last year.
ALE shows a small growth in Revenue. Measured over the last years, the Revenue has been growing by 4.28% yearly.
EPS 1Y (TTM)-23.32%
EPS 3Y-1.36%
EPS 5Y-2.89%
EPS Q2Q%10.23%
Revenue 1Y (TTM)-11.15%
Revenue growth 3Y2.53%
Revenue growth 5Y4.28%
Sales Q2Q%-0.77%
3.2 Future
ALE is expected to show quite a strong growth in Earnings Per Share. In the coming years, the EPS will grow by 11.96% yearly.
Based on estimates for the next years, ALE will show a small growth in Revenue. The Revenue will grow by 5.14% on average per year.
EPS Next Y25.22%
EPS Next 2Y17.21%
EPS Next 3Y15.1%
EPS Next 5Y11.96%
Revenue Next Year-1.51%
Revenue Next 2Y2%
Revenue Next 3Y3.82%
Revenue Next 5Y5.14%
3.3 Evolution
The EPS growth rate is accelerating: in the next years the growth will be better than in the last years.
The Revenue growth rate is stable: in the next years the growth will be about the same than in the last years.
4. Valuation
4.1 Price/Earnings Ratio
With a Price/Earnings ratio of 20.33, ALE is valued on the expensive side.
Based on the Price/Earnings ratio, ALE is valued a bit more expensive than the industry average as 70.21% of the companies are valued more cheaply.
The average S&P500 Price/Earnings ratio is at 27.45. ALE is valued slightly cheaper when compared to this.
The Price/Forward Earnings ratio is 15.23, which indicates a correct valuation of ALE.
ALE's Price/Forward Earnings is on the same level as the industry average.
The average S&P500 Price/Forward Earnings ratio is at 21.90. ALE is valued slightly cheaper when compared to this.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 20.33 | ||
| Fwd PE | 15.23 |
4.2 Price Multiples
Based on the Enterprise Value to EBITDA ratio, ALE is valued a bit more expensive than 68.09% of the companies in the same industry.
Based on the Price/Free Cash Flow ratio, ALE is valued a bit cheaper than the industry average as 74.47% of the companies are valued more expensively.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 64.26 | ||
| EV/EBITDA | 12.46 |
4.3 Compensation for Growth
The low PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates a rather cheap valuation of the company.
A more expensive valuation may be justified as ALE's earnings are expected to grow with 15.10% in the coming years.
PEG (NY)0.81
PEG (5Y)N/A
EPS Next 2Y17.21%
EPS Next 3Y15.1%
5. Dividend
5.1 Amount
ALE has a Yearly Dividend Yield of 4.50%, which is a nice return.
ALE's Dividend Yield is a higher than the industry average which is at 3.64.
Compared to an average S&P500 Dividend Yield of 2.38, ALE pays a better dividend.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 4.5% |
5.2 History
The dividend of ALE has a limited annual growth rate of 3.68%.
ALE has been paying a dividend for at least 10 years, so it has a reliable track record.
ALE has not decreased its dividend for at least 10 years, so it has a reliable track record of non decreasing dividend.
Dividend Growth(5Y)3.68%
Div Incr Years14
Div Non Decr Years19
5.3 Sustainability
89.06% of the earnings are spent on dividend by ALE. This is not a sustainable payout ratio.
The dividend of ALE is growing, but earnings are growing more, so the dividend growth is sustainable.
DP89.06%
EPS Next 2Y17.21%
EPS Next 3Y15.1%
64.86
+0.09 (+0.14%)
Chartmill FA Rating
GICS SectorUtilities
GICS IndustryGroupUtilities
GICS IndustryElectric Utilities
Earnings (Last)
Earnings (Next)
Inst Owners74.61%
Inst Owner Change-50.83%
Ins Owners0.27%
Ins Owner Change5.87%
Market Cap3.76B
Analysts77.14
Price Target67.5 (4.07%)
Short Float %2.18%
Short Ratio3.54
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 4.5% |
Yearly Dividend2.82
Dividend Growth(5Y)3.68%
DP89.06%
Div Incr Years14
Div Non Decr Years19
Ex-Date
Surprises & Revisions
EPS beat(2)0
Avg EPS beat(2)-15.2%
Min EPS beat(2)-22.75%
Max EPS beat(2)-7.65%
EPS beat(4)0
Avg EPS beat(4)-20.73%
Min EPS beat(4)-35.87%
Max EPS beat(4)-7.65%
EPS beat(8)2
Avg EPS beat(8)3.87%
EPS beat(12)3
Avg EPS beat(12)-0.57%
EPS beat(16)5
Avg EPS beat(16)-1.69%
Revenue beat(2)0
Avg Revenue beat(2)-12.96%
Min Revenue beat(2)-13.16%
Max Revenue beat(2)-12.76%
Revenue beat(4)1
Avg Revenue beat(4)-14.66%
Min Revenue beat(4)-35.83%
Max Revenue beat(4)3.11%
Revenue beat(8)2
Avg Revenue beat(8)-9.14%
Revenue beat(12)6
Avg Revenue beat(12)-0.89%
Revenue beat(16)10
Avg Revenue beat(16)2.77%
PT rev (1m)0%
PT rev (3m)0%
EPS NQ rev (1m)0%
EPS NQ rev (3m)4.65%
EPS NY rev (1m)-2.45%
EPS NY rev (3m)-0.26%
Revenue NQ rev (1m)0%
Revenue NQ rev (3m)0%
Revenue NY rev (1m)0%
Revenue NY rev (3m)0%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 20.33 | ||
| Fwd PE | 15.23 | ||
| P/S | 2.46 | ||
| P/FCF | 64.26 | ||
| P/OCF | 7.41 | ||
| P/B | 1.31 | ||
| P/tB | 1.39 | ||
| EV/EBITDA | 12.46 |
EPS(TTM)3.19
EY4.92%
EPS(NY)4.26
Fwd EY6.57%
FCF(TTM)1.01
FCFY1.56%
OCF(TTM)8.75
OCFY13.49%
SpS26.34
BVpS49.45
TBVpS46.77
PEG (NY)0.81
PEG (5Y)N/A
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 2.69% | ||
| ROE | 6.44% | ||
| ROCE | 2.56% | ||
| ROIC | 2.34% | ||
| ROICexc | 2.37% | ||
| ROICexgc | 2.43% | ||
| OM | 10.86% | ||
| PM (TTM) | 12.1% | ||
| GM | 91.5% | ||
| FCFM | 3.83% |
ROA(3y)3.04%
ROA(5y)2.9%
ROE(3y)7.37%
ROE(5y)7.27%
ROIC(3y)2.33%
ROIC(5y)2.36%
ROICexc(3y)2.34%
ROICexc(5y)2.38%
ROICexgc(3y)2.4%
ROICexgc(5y)2.41%
ROCE(3y)2.55%
ROCE(5y)2.58%
ROICexcg growth 3Y0.06%
ROICexcg growth 5Y-6.66%
ROICexc growth 3Y-0.77%
ROICexc growth 5Y-7.11%
OM growth 3Y-0.62%
OM growth 5Y-6.31%
PM growth 3Y-0.57%
PM growth 5Y-4.77%
GM growth 3Y-1.28%
GM growth 5Y-0.42%
F-Score5
Asset Turnover0.22
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.64 | ||
| Debt/FCF | 32.94 | ||
| Debt/EBITDA | 4.08 | ||
| Cap/Depr | 158.55% | ||
| Cap/Sales | 29.39% | ||
| Interest Coverage | 2.23 | ||
| Cash Conversion | 113.01% | ||
| Profit Quality | 31.67% | ||
| Current Ratio | 1.26 | ||
| Quick Ratio | 0.81 | ||
| Altman-Z | 1.1 |
F-Score5
WACC7.32%
ROIC/WACC0.32
Cap/Depr(3y)106.82%
Cap/Depr(5y)166.23%
Cap/Sales(3y)17.22%
Cap/Sales(5y)29.28%
Profit Quality(3y)61.51%
Profit Quality(5y)N/A
High Growth Momentum
Growth
EPS 1Y (TTM)-23.32%
EPS 3Y-1.36%
EPS 5Y-2.89%
EPS Q2Q%10.23%
EPS Next Y25.22%
EPS Next 2Y17.21%
EPS Next 3Y15.1%
EPS Next 5Y11.96%
Revenue 1Y (TTM)-11.15%
Revenue growth 3Y2.53%
Revenue growth 5Y4.28%
Sales Q2Q%-0.77%
Revenue Next Year-1.51%
Revenue Next 2Y2%
Revenue Next 3Y3.82%
Revenue Next 5Y5.14%
EBIT growth 1Y-7.84%
EBIT growth 3Y1.9%
EBIT growth 5Y-2.29%
EBIT Next Year158.47%
EBIT Next 3Y53.28%
EBIT Next 5Y37.33%
FCF growth 1Y-31.42%
FCF growth 3YN/A
FCF growth 5YN/A
OCF growth 1Y59.25%
OCF growth 3Y20.16%
OCF growth 5Y12.87%