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
In the past year ALE was profitable.
ALE had a positive operating cash flow in the past year.
Each year in the past 5 years ALE has 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 (2.67%) which is comparable to the rest of the industry.
ALE's Return On Equity of 6.36% is on the low side compared to the rest of the industry. ALE is outperformed by 75.56% of its industry peers.
With a Return On Invested Capital value of 2.23%, ALE is not doing good in the industry: 88.89% of the companies in the same industry are doing better.
The Average Return On Invested Capital over the past 3 years for ALE is below the industry average of 4.67%.
The 3 year average ROIC (2.22%) for ALE is below the current ROIC(2.23%), indicating increased profibility in the last year.
| 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
With a Profit Margin value of 11.49%, ALE perfoms like the industry average, outperforming 46.67% of the companies in the same industry.
ALE's Profit Margin has improved in the last couple of years.
The Operating Margin of ALE (10.53%) is worse than 84.44% of its industry peers.
In the last couple of years the Operating Margin of ALE has declined.
Looking at the Gross Margin, with a value of 91.07%, ALE belongs to the top of the industry, outperforming 93.33% of the companies in the same industry.
In the last couple of years the Gross Margin of ALE has declined.
| 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
The Return on Invested Capital (ROIC) is below the Cost of Capital (WACC), so ALE is destroying value.
The number of shares outstanding for ALE has been increased compared to 1 year ago.
ALE has more shares outstanding than it did 5 years ago.
The debt/assets ratio for ALE has been reduced compared to a year ago.
2.2 Solvency
Based on the Altman-Z score of 1.13, we must say that ALE is in the distress zone and has some risk of bankruptcy.
ALE has a better Altman-Z score (1.13) than 71.11% of its industry peers.
ALE has a debt to FCF ratio of 15.51. This is a negative value and a sign of low solvency as ALE would need 15.51 years to pay back of all of its debts.
ALE has a Debt to FCF ratio of 15.51. This is in the better half of the industry: ALE outperforms 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.
With a decent Debt to Equity ratio value of 0.62, ALE is doing good in the industry, outperforming 73.33% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.62 | ||
| Debt/FCF | 15.51 | ||
| Altman-Z | 1.13 |
ROIC/WACC0.3
WACC7.39%
2.3 Liquidity
ALE has a Current Ratio of 1.45. This is a normal value and indicates that ALE is financially healthy and should not expect problems in meeting its short term obligations.
The Current ratio of ALE (1.45) is better than 77.78% of its industry peers.
ALE has a Quick Ratio of 1.45. This is a bad value and indicates that ALE is not financially healthy enough and could expect problems in meeting 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%.
ALE shows a small growth in Earnings Per Share. Measured over the last years, the EPS has been growing by 5.18% yearly.
The Revenue for ALE has decreased by -17.62% in the past year. This is quite bad
The Revenue has been growing slightly by 4.64% on average over the past years.
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
ALE is expected to show a small growth in Earnings Per Share. In the coming years, the EPS will grow by 3.72% yearly.
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
When comparing the EPS growth rate of the last years to the growth rate of the upcoming years, we see that the growth is decreasing.
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 20.67 indicates a rather expensive valuation of ALE.
Based on the Price/Earnings ratio, ALE is valued a bit more expensive than the industry average as 75.56% of the companies are valued more cheaply.
Compared to an average S&P500 Price/Earnings ratio of 27.73, ALE is valued a bit cheaper.
The Price/Forward Earnings ratio is 16.01, which indicates a correct valuation of ALE.
The rest of the industry has a similar Price/Forward Earnings ratio as ALE.
ALE is valuated rather cheaply when we compare the Price/Forward Earnings ratio to 22.83, which is the current average of the S&P500 Index.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 20.67 | ||
| Fwd PE | 16.01 |
4.2 Price Multiples
ALE's Enterprise Value to EBITDA ratio is a bit more expensive when compared to the industry. ALE is more expensive than 68.89% of the companies in the same industry.
ALE's Price/Free Cash Flow ratio is a bit cheaper when compared to the industry. ALE is cheaper than 73.33% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 32.37 | ||
| EV/EBITDA | 12.38 |
4.3 Compensation for Growth
PEG (NY)N/A
PEG (5Y)3.99
EPS Next 2Y-3.22%
EPS Next 3Y0.81%
5. Dividend
5.1 Amount
ALE has a Yearly Dividend Yield of 4.37%, which is a nice return.
ALE's Dividend Yield is rather good when compared to the industry average which is at 3.66. ALE pays more dividend than 82.22% of the companies in the same industry.
ALE's Dividend Yield is rather good when compared to the S&P500 average which is at 2.34.
| 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 paid a dividend for at least 10 years, which is 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 Years14
Div Non Decr Years19
5.3 Sustainability
ALE pays out 89.35% of its income as dividend. 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 (12/20/2024, 8:04:00 PM)
After market: 64.35 -0.15 (-0.23%)64.5
-0.1 (-0.15%)
Chartmill FA Rating
GICS SectorUtilities
GICS IndustryGroupUtilities
GICS IndustryElectric Utilities
Earnings (Last)
Earnings (Next)
Inst Owners77.1%
Inst Owner Change-3.21%
Ins Owners0.26%
Ins Owner Change0%
Market Cap3.73B
Analysts73.33
Price Target67.7 (4.96%)
Short Float %1.73%
Short Ratio3.72
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 4.37% |
Dividend Growth(5Y)3.86%
DP89.35%
Div Incr Years14
Div Non Decr Years19
Ex-Date
Surprises & Revisions
EPS beat(2)0
Avg EPS beat(2)-26.26%
Min EPS beat(2)-35.87%
Max EPS beat(2)-16.66%
EPS beat(4)0
Avg EPS beat(4)-19.12%
Min EPS beat(4)-35.87%
Max EPS beat(4)-8.97%
EPS beat(8)2
Avg EPS beat(8)2.91%
EPS beat(12)4
Avg EPS beat(12)2.24%
EPS beat(16)6
Avg EPS beat(16)0.8%
Revenue beat(2)1
Avg Revenue beat(2)-16.36%
Min Revenue beat(2)-35.83%
Max Revenue beat(2)3.11%
Revenue beat(4)1
Avg Revenue beat(4)-14.97%
Min Revenue beat(4)-35.83%
Max Revenue beat(4)3.11%
Revenue beat(8)4
Avg Revenue beat(8)-0.17%
Revenue beat(12)8
Avg Revenue beat(12)3.61%
Revenue beat(16)12
Avg Revenue beat(16)4.96%
PT rev (1m)2.96%
PT rev (3m)3.75%
EPS NQ rev (1m)0%
EPS NQ rev (3m)-4.38%
EPS NY rev (1m)0%
EPS NY rev (3m)0%
Revenue NQ rev (1m)0%
Revenue NQ rev (3m)-6.88%
Revenue NY rev (1m)0%
Revenue NY rev (3m)0%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 20.67 | ||
| Fwd PE | 16.01 | ||
| P/S | 2.38 | ||
| P/FCF | 32.37 | ||
| P/OCF | 8.62 | ||
| P/B | 1.32 | ||
| P/tB | 1.39 | ||
| EV/EBITDA | 12.38 |
EPS(TTM)3.12
EY4.84%
EPS(NY)4.03
Fwd EY6.24%
FCF(TTM)1.99
FCFY3.09%
OCF(TTM)7.48
OCFY11.6%
SpS27.11
BVpS48.97
TBVpS46.28
PEG (NY)N/A
PEG (5Y)3.99
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 2.67% | ||
| ROE | 6.36% | ||
| ROCE | 2.58% | ||
| ROIC | 2.23% | ||
| ROICexc | 2.27% | ||
| ROICexgc | 2.32% | ||
| OM | 10.53% | ||
| PM (TTM) | 11.49% | ||
| GM | 91.07% | ||
| FCFM | 7.35% |
ROA(3y)3.04%
ROA(5y)3.04%
ROE(3y)7.62%
ROE(5y)7.68%
ROIC(3y)2.22%
ROIC(5y)2.42%
ROICexc(3y)2.24%
ROICexc(5y)2.44%
ROICexgc(3y)2.27%
ROICexgc(5y)2.47%
ROCE(3y)2.56%
ROCE(5y)2.8%
ROICexcg growth 3Y3.4%
ROICexcg growth 5Y-8.81%
ROICexc growth 3Y2.53%
ROICexc growth 5Y-7.44%
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%
F-Score5
Asset Turnover0.23
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.62 | ||
| Debt/FCF | 15.51 | ||
| Debt/EBITDA | 3.99 | ||
| Cap/Depr | 116.61% | ||
| Cap/Sales | 20.25% | ||
| Interest Coverage | 2.2 | ||
| Cash Conversion | 98.93% | ||
| Profit Quality | 63.93% | ||
| Current Ratio | 1.45 | ||
| Quick Ratio | 0.95 | ||
| Altman-Z | 1.13 |
F-Score5
WACC7.39%
ROIC/WACC0.3
Cap/Depr(3y)129.62%
Cap/Depr(5y)196.62%
Cap/Sales(3y)20.61%
Cap/Sales(5y)34.27%
Profit Quality(3y)N/A
Profit Quality(5y)N/A
High Growth Momentum
Growth
EPS 1Y (TTM)-27.27%
EPS 3Y8.68%
EPS 5Y5.18%
EPS Q2Q%-47.65%
EPS Next Y-12.27%
EPS Next 2Y-3.22%
EPS Next 3Y0.81%
EPS Next 5Y3.72%
Revenue 1Y (TTM)-17.62%
Revenue growth 3Y17.15%
Revenue growth 5Y4.64%
Sales Q2Q%7.5%
Revenue Next Year-11.58%
Revenue Next 2Y-0.76%
Revenue Next 3Y1.25%
Revenue Next 5Y2.36%
EBIT growth 1Y-3.79%
EBIT growth 3Y6.23%
EBIT growth 5Y-2.1%
EBIT Next Year112.42%
EBIT Next 3Y37.14%
EBIT Next 5Y29.39%
FCF growth 1Y209.19%
FCF growth 3YN/A
FCF growth 5Y21.08%
OCF growth 1Y219.26%
OCF growth 3Y24.98%
OCF growth 5Y6.21%