ALLETE INC (ALE)
US0185223007 - Common Stock
We assign a fundamental rating of 4 out of 10 to ALE. ALE was compared to 47 industry peers in the Electric Utilities industry. Both the profitability and the financial health of ALE get a neutral evaluation. Nothing too spectacular is happening here. ALE has a expensive valuation and it also scores bad on growth. Finally ALE also has an excellent dividend rating.
1. Profitability
1.1 Basic Checks
ALE had positive earnings in the past year.
ALE had a positive operating cash flow in the past year.
In the past 5 years ALE has always been profitable.
In the past 5 years ALE always reported a positive cash flow from operatings.
1.2 Ratios
ALE has a Return On Assets of 2.67%. This is comparable to the rest of the industry: ALE outperforms 48.89% of its industry peers.
Looking at the Return On Equity, with a value of 6.36%, ALE is doing worse than 75.56% of the companies in the same industry.
Looking at the Return On Invested Capital, with a value of 2.23%, ALE is doing worse than 88.89% of the companies in the same industry.
ALE had an Average Return On Invested Capital over the past 3 years of 2.22%. This is below the industry average of 4.67%.
The last Return On Invested Capital (2.23%) for ALE is above the 3 year average (2.22%), which is a sign of increasing profitability.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 2.67% | ||
| ROE | 6.36% | ||
| ROIC | 2.23% |
ROA(3y)3.04%
ROA(5y)3.04%
ROE(3y)7.62%
ROE(5y)7.68%
ROIC(3y)2.22%
ROIC(5y)2.42%
1.3 Margins
ALE has a Profit Margin of 11.49%. This is comparable to the rest of the industry: ALE outperforms 46.67% of its industry peers.
In the last couple of years the Profit Margin of ALE has grown nicely.
Looking at the Operating Margin, with a value of 10.53%, ALE is doing worse than 84.44% of the companies in the same industry.
In the last couple of years the Operating Margin of ALE has declined.
ALE's Gross Margin of 91.07% is amongst the best of the industry. ALE outperforms 93.33% of its industry peers.
ALE's Gross Margin has declined in the last couple of years.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 10.53% | ||
| PM (TTM) | 11.49% | ||
| GM | 91.07% |
OM growth 3Y-9.32%
OM growth 5Y-6.44%
PM growth 3Y-2.42%
PM growth 5Y2.5%
GM growth 3Y-7.43%
GM growth 5Y-2.62%
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.
ALE has more shares outstanding than it did 1 year ago.
Compared to 5 years ago, ALE has more shares outstanding
Compared to 1 year ago, ALE has an improved debt to assets ratio.
2.2 Solvency
ALE has an Altman-Z score of 1.13. This is a bad value and indicates that ALE is not financially healthy and even has some risk of bankruptcy.
ALE has a better Altman-Z score (1.13) than 68.89% of its industry peers.
The Debt to FCF ratio of ALE is 15.51, which is on the high side as it means it would take ALE, 15.51 years of fcf income to pay off all of its debts.
ALE has a better Debt to FCF ratio (15.51) than 77.78% of its industry peers.
ALE has a Debt/Equity ratio of 0.62. This is a neutral value indicating ALE is somewhat dependend on debt financing.
ALE's Debt to Equity ratio of 0.62 is fine compared to the rest of the industry. ALE outperforms 73.33% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.62 | ||
| Debt/FCF | 15.51 | ||
| Altman-Z | 1.13 |
ROIC/WACC0.31
WACC7.28%
2.3 Liquidity
A Current Ratio of 1.45 indicates that ALE should not have too much problems paying its short term obligations.
With a decent Current ratio value of 1.45, ALE is doing good in the industry, outperforming 77.78% of the companies in the same industry.
A Quick Ratio of 0.95 indicates that ALE may have some problems paying its short term obligations.
ALE's Quick ratio of 0.95 is in line compared to the rest of the industry. ALE outperforms 57.78% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 1.45 | ||
| Quick Ratio | 0.95 |
3. Growth
3.1 Past
ALE shows a strong negative growth in Earnings Per Share. In the last year the EPS decreased by -27.27%.
Measured over the past 5 years, ALE shows a small growth in Earnings Per Share. The EPS has been growing by 5.18% on average per year.
ALE shows a very negative growth in Revenue. In the last year, the Revenue has decreased by -17.62%.
Measured over the past years, ALE shows a small growth in Revenue. The Revenue has been growing by 4.64% on average per year.
EPS 1Y (TTM)-27.27%
EPS 3Y8.68%
EPS 5Y5.18%
EPS Q2Q%-47.65%
Revenue 1Y (TTM)-17.62%
Revenue growth 3Y17.15%
Revenue growth 5Y4.64%
Sales Q2Q%7.5%
3.2 Future
The Earnings Per Share is expected to grow by 3.72% on average over the next years.
Based on estimates for the next years, ALE will show a small growth in Revenue. The Revenue will grow by 2.36% on average per year.
EPS Next Y-12.27%
EPS Next 2Y-3.22%
EPS Next 3Y0.81%
EPS Next 5Y3.72%
Revenue Next Year-11.58%
Revenue Next 2Y-0.76%
Revenue Next 3Y1.25%
Revenue Next 5Y2.36%
3.3 Evolution
The EPS growth rate is decreasing: in the next years the growth will be less than in the last years.
When comparing the Revenue growth rate of the last years to the growth rate of the upcoming years, we see that the growth is decreasing.
4. Valuation
4.1 Price/Earnings Ratio
A Price/Earnings ratio of 20.62 indicates a rather expensive valuation of ALE.
Compared to the rest of the industry, the Price/Earnings ratio of ALE indicates a slightly more expensive valuation: ALE is more expensive than 66.67% of the companies listed in the same industry.
The average S&P500 Price/Earnings ratio is at 28.96. ALE is valued slightly cheaper when compared to this.
Based on the Price/Forward Earnings ratio of 15.98, the valuation of ALE can be described as correct.
ALE's Price/Forward Earnings ratio is in line with the industry average.
ALE's Price/Forward Earnings ratio indicates a valuation a bit cheaper than the S&P500 average which is at 23.82.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 20.62 | ||
| Fwd PE | 15.98 |
4.2 Price Multiples
Compared to the rest of the industry, the Enterprise Value to EBITDA ratio of ALE indicates a slightly more expensive valuation: ALE is more expensive than 64.44% of the companies listed in the same industry.
Compared to the rest of the industry, the Price/Free Cash Flow ratio of ALE indicates a somewhat cheap valuation: ALE is cheaper than 73.33% of the companies listed in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 32.3 | ||
| EV/EBITDA | 12.37 |
4.3 Compensation for Growth
PEG (NY)N/A
PEG (5Y)3.98
EPS Next 2Y-3.22%
EPS Next 3Y0.81%
5. Dividend
5.1 Amount
With a Yearly Dividend Yield of 4.37%, ALE is a good candidate for dividend investing.
ALE's Dividend Yield is rather good when compared to the industry average which is at 3.44. ALE pays more dividend than 86.67% of the companies in the same industry.
Compared to an average S&P500 Dividend Yield of 2.23, ALE pays a better dividend.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 4.37% |
5.2 History
The dividend of ALE has a limited annual growth rate of 3.86%.
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)3.86%
Div Incr Years13
Div Non Decr Years18
5.3 Sustainability
89.35% of the earnings are spent on dividend by ALE. This is not a sustainable payout ratio.
The dividend of ALE is growing, but the earnings are growing slower. This means the dividend growth is not sustainable.
DP89.35%
EPS Next 2Y-3.22%
EPS Next 3Y0.81%
ALLETE INC
NYSE:ALE (11/21/2024, 8:11:47 PM)
After market: 64.35 0 (0%)64.35
-0.02 (-0.03%)
Chartmill FA Rating
GICS SectorUtilities
GICS IndustryGroupUtilities
GICS IndustryElectric Utilities
Earnings (Last)
Earnings (Next)
Inst Owners
Inst Owner Change
Ins Owners
Ins Owner Change
Market Cap3.72B
Analysts
Price Target
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 4.37% |
Dividend Growth(5Y)
DP
Div Incr Years
Div Non Decr Years
Ex-Date
Surprises & Revisions
EPS beat(2)
Avg EPS beat(2)
Min EPS beat(2)
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EPS beat(4)
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EPS beat(8)
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EPS beat(12)
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EPS beat(16)
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Revenue beat(2)
Avg Revenue beat(2)
Min Revenue beat(2)
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Revenue beat(4)
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Revenue beat(8)
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Revenue beat(12)
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Revenue beat(16)
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PT rev (1m)
PT rev (3m)
EPS NQ rev (1m)
EPS NQ rev (3m)
EPS NY rev (1m)
EPS NY rev (3m)
Revenue NQ rev (1m)
Revenue NQ rev (3m)
Revenue NY rev (1m)
Revenue NY rev (3m)
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 20.62 | ||
| Fwd PE | 15.98 | ||
| P/S | |||
| P/FCF | |||
| P/OCF | |||
| P/B | |||
| P/tB | |||
| EV/EBITDA |
EPS(TTM)
EY
EPS(NY)
Fwd EY
FCF(TTM)
FCFY
OCF(TTM)
OCFY
SpS
BVpS
TBVpS
PEG (NY)N/A
PEG (5Y)3.98
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 2.67% | ||
| ROE | 6.36% | ||
| ROCE | |||
| ROIC | |||
| ROICexc | |||
| ROICexgc | |||
| OM | 10.53% | ||
| PM (TTM) | 11.49% | ||
| GM | 91.07% | ||
| FCFM |
ROA(3y)
ROA(5y)
ROE(3y)
ROE(5y)
ROIC(3y)
ROIC(5y)
ROICexc(3y)
ROICexc(5y)
ROICexgc(3y)
ROICexgc(5y)
ROCE(3y)
ROCE(5y)
ROICexcg growth 3Y
ROICexcg growth 5Y
ROICexc growth 3Y
ROICexc growth 5Y
OM growth 3Y
OM growth 5Y
PM growth 3Y
PM growth 5Y
GM growth 3Y
GM growth 5Y
F-Score
Asset Turnover0.23
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.62 | ||
| Debt/FCF | |||
| Debt/EBITDA | |||
| Cap/Depr | |||
| Cap/Sales | |||
| Interest Coverage | |||
| Cash Conversion | |||
| Profit Quality | |||
| Current Ratio | 1.45 | ||
| Quick Ratio | 0.95 | ||
| Altman-Z |
F-Score
WACC
ROIC/WACC
Cap/Depr(3y)
Cap/Depr(5y)
Cap/Sales(3y)
Cap/Sales(5y)
Profit Quality(3y)
Profit Quality(5y)
High Growth Momentum
Growth
EPS 1Y (TTM)-27.27%
EPS 3Y8.68%
EPS 5Y
EPS Q2Q%
EPS Next Y-12.27%
EPS Next 2Y
EPS Next 3Y
EPS Next 5Y
Revenue 1Y (TTM)-17.62%
Revenue growth 3Y17.15%
Revenue growth 5Y
Sales Q2Q%
Revenue Next Year
Revenue Next 2Y
Revenue Next 3Y
Revenue Next 5Y
EBIT growth 1Y
EBIT growth 3Y
EBIT growth 5Y
EBIT Next Year
EBIT Next 3Y
EBIT Next 5Y
FCF growth 1Y
FCF growth 3Y
FCF growth 5Y
OCF growth 1Y
OCF growth 3Y
OCF growth 5Y