ALLETE INC (ALE) Stock Fundamental Analysis
USA - NYSE:ALE - US0185223007 - Common Stock
67.38 USD
+0.04 (+0.06%)
67.38 USD
0 (0%)
We assign a fundamental rating of 4 out of 10 to ALE. ALE was compared to 47 industry peers in the Electric Utilities industry. While ALE is still in line with the averages on profitability rating, there are concerns on its financial health. ALE has a expensive valuation and it also scores bad on growth. ALE also has an excellent dividend rating.
1. Profitability
1.1 Basic Checks
In the past year ALE was profitable.
In the past year ALE had a positive cash flow from operations.
Each year in the past 5 years ALE has been profitable.
ALE had a positive operating cash flow in each of the past 5 years.
1.2 Ratios
ALE has a Return On Assets of 2.66%. This is comparable to the rest of the industry: ALE outperforms 48.94% of its industry peers.
ALE's Return On Equity of 6.42% is on the low side compared to the rest of the industry. ALE is outperformed by 80.85% of its industry peers.
Looking at the Return On Invested Capital, with a value of 2.15%, ALE is doing worse than 89.36% of the companies in the same industry.
The Average Return On Invested Capital over the past 3 years for ALE is below the industry average of 4.90%.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 2.66% | ||
| ROE | 6.42% | ||
| ROIC | 2.15% |
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
The Profit Margin of ALE (11.98%) is comparable to the rest of the industry.
In the last couple of years the Profit Margin of ALE has declined.
The Operating Margin of ALE (10.08%) is worse than 85.11% of its industry peers.
In the last couple of years the Operating Margin of ALE has declined.
With an excellent Gross Margin value of 92.03%, ALE belongs to the best of the industry, outperforming 95.74% of the companies in the same industry.
In the last couple of years the Gross Margin of ALE has remained more or less at the same level.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 10.08% | ||
| PM (TTM) | 11.98% | ||
| GM | 92.03% |
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.
Compared to 1 year ago, ALE has more shares outstanding
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 1.11, we must say that ALE is in the distress zone and has some risk of bankruptcy.
ALE has a better Altman-Z score (1.11) than 63.83% of its industry peers.
A Debt/Equity ratio of 0.68 indicates that ALE is somewhat dependend on debt financing.
With a decent Debt to Equity ratio value of 0.68, ALE is doing good in the industry, outperforming 68.09% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.68 | ||
| Debt/FCF | N/A | ||
| Altman-Z | 1.11 |
ROIC/WACC0.3
WACC7.14%
2.3 Liquidity
A Current Ratio of 1.34 indicates that ALE should not have too much problems paying its short term obligations.
ALE has a better Current ratio (1.34) than 78.72% of its industry peers.
ALE has a Quick Ratio of 1.34. This is a bad value and indicates that ALE is not financially healthy enough and could expect problems in meeting its short term obligations.
The Quick ratio of ALE (0.81) is comparable to the rest of the industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 1.34 | ||
| Quick Ratio | 0.81 |
3. Growth
3.1 Past
The earnings per share for ALE have decreased strongly by -17.23% in the last year.
Measured over the past years, ALE shows a decrease in Earnings Per Share. The EPS has been decreasing by -2.89% on average per year.
The Revenue has decreased by -0.44% in the past 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)-17.23%
EPS 3Y-1.36%
EPS 5Y-2.89%
EPS Q2Q%-3.51%
Revenue 1Y (TTM)-0.44%
Revenue growth 3Y2.53%
Revenue growth 5Y4.28%
Sales Q2Q%1.64%
3.2 Future
Based on estimates for the next years, ALE will show a quite strong growth in Earnings Per Share. The EPS will grow by 11.96% on average per year.
ALE is expected to show a small growth in Revenue. In the coming years, the Revenue will grow by 5.14% yearly.
EPS Next Y18.92%
EPS Next 2Y14.02%
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.
When comparing the Revenue growth rate of the last years to the growth rate of the upcoming years, we see that the growth is stable.
4. Valuation
4.1 Price/Earnings Ratio
ALE is valuated rather expensively with a Price/Earnings ratio of 21.26.
Based on the Price/Earnings ratio, ALE is valued a bit more expensive than the industry average as 63.83% of the companies are valued more cheaply.
When comparing the Price/Earnings ratio of ALE to the average of the S&P500 Index (26.89), we can say ALE is valued slightly cheaper.
Based on the Price/Forward Earnings ratio of 16.72, the valuation of ALE can be described as correct.
Compared to the rest of the industry, the Price/Forward Earnings ratio of ALE is on the same level as its industry peers.
ALE is valuated rather cheaply when we compare the Price/Forward Earnings ratio to 22.99, which is the current average of the S&P500 Index.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 21.26 | ||
| Fwd PE | 16.72 |
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 65.96% of the companies listed in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | N/A | ||
| EV/EBITDA | 13.16 |
4.3 Compensation for Growth
The PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates a correct valuation of the company.
ALE's earnings are expected to grow with 15.10% in the coming years. This may justify a more expensive valuation.
PEG (NY)1.12
PEG (5Y)N/A
EPS Next 2Y14.02%
EPS Next 3Y15.1%
5. Dividend
5.1 Amount
With a Yearly Dividend Yield of 4.34%, ALE is a good candidate for dividend investing.
Compared to an average industry Dividend Yield of 3.23, ALE pays a better dividend. On top of this ALE pays more dividend than 89.36% of the companies listed in the same industry.
Compared to an average S&P500 Dividend Yield of 2.31, ALE pays a better dividend.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 4.34% |
5.2 History
The dividend of ALE has a limited annual growth rate of 3.68%.
ALE has paid a dividend for at least 10 years, which is a reliable track record.
ALE has not decreased their dividend for at least 10 years, which is a reliable track record.
Dividend Growth(5Y)3.68%
Div Incr Years14
Div Non Decr Years19
5.3 Sustainability
90.47% 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.
DP90.47%
EPS Next 2Y14.02%
EPS Next 3Y15.1%
67.38
+0.04 (+0.06%)
Chartmill FA Rating
GICS SectorUtilities
GICS IndustryGroupUtilities
GICS IndustryElectric Utilities
Earnings (Last)
Earnings (Next)
Inst Owners76.96%
Inst Owner Change0.1%
Ins Owners0.27%
Ins Owner Change2.7%
Market Cap3.91B
Revenue(TTM)1.53B
Net Income(TTM)183.60M
Analysts80
Price Target70.67 (4.88%)
Short Float %1.32%
Short Ratio1.11
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 4.34% |
Yearly Dividend2.82
Dividend Growth(5Y)3.68%
DP90.47%
Div Incr Years14
Div Non Decr Years19
Ex-Date
Surprises & Revisions
EPS beat(2)0
Avg EPS beat(2)-22.35%
Min EPS beat(2)-37.05%
Max EPS beat(2)-7.65%
EPS beat(4)0
Avg EPS beat(4)-21.03%
Min EPS beat(4)-37.05%
Max EPS beat(4)-7.65%
EPS beat(8)1
Avg EPS beat(8)-2.12%
EPS beat(12)2
Avg EPS beat(12)-5.43%
EPS beat(16)4
Avg EPS beat(16)-4.14%
Revenue beat(2)0
Avg Revenue beat(2)-14.64%
Min Revenue beat(2)-16.12%
Max Revenue beat(2)-13.16%
Revenue beat(4)1
Avg Revenue beat(4)-9.73%
Min Revenue beat(4)-16.12%
Max Revenue beat(4)3.11%
Revenue beat(8)1
Avg Revenue beat(8)-13.44%
Revenue beat(12)5
Avg Revenue beat(12)-2.88%
Revenue beat(16)9
Avg Revenue beat(16)0.95%
PT rev (1m)0%
PT rev (3m)0.83%
EPS NQ rev (1m)0%
EPS NQ rev (3m)1.05%
EPS NY rev (1m)0%
EPS NY rev (3m)-5.03%
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 | 21.26 | ||
| Fwd PE | 16.72 | ||
| P/S | 2.55 | ||
| P/FCF | N/A | ||
| P/OCF | 9.09 | ||
| P/B | 1.37 | ||
| P/tB | 1.44 | ||
| EV/EBITDA | 13.16 |
EPS(TTM)3.17
EY4.7%
EPS(NY)4.03
Fwd EY5.98%
FCF(TTM)-0.92
FCFYN/A
OCF(TTM)7.41
OCFY11%
SpS26.4
BVpS49.31
TBVpS46.63
PEG (NY)1.12
PEG (5Y)N/A
Graham Number59.3
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 2.66% | ||
| ROE | 6.42% | ||
| ROCE | 2.35% | ||
| ROIC | 2.15% | ||
| ROICexc | 2.16% | ||
| ROICexgc | 2.22% | ||
| OM | 10.08% | ||
| PM (TTM) | 11.98% | ||
| GM | 92.03% | ||
| FCFM | N/A |
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%
ROICexgc growth 3Y0.06%
ROICexgc 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-Score4
Asset Turnover0.22
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.68 | ||
| Debt/FCF | N/A | ||
| Debt/EBITDA | 4.34 | ||
| Cap/Depr | 166.59% | ||
| Cap/Sales | 31.56% | ||
| Interest Coverage | 1.96 | ||
| Cash Conversion | 96.74% | ||
| Profit Quality | N/A | ||
| Current Ratio | 1.34 | ||
| Quick Ratio | 0.81 | ||
| Altman-Z | 1.11 |
F-Score4
WACC7.14%
ROIC/WACC0.3
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)-17.23%
EPS 3Y-1.36%
EPS 5Y-2.89%
EPS Q2Q%-3.51%
EPS Next Y18.92%
EPS Next 2Y14.02%
EPS Next 3Y15.1%
EPS Next 5Y11.96%
Revenue 1Y (TTM)-0.44%
Revenue growth 3Y2.53%
Revenue growth 5Y4.28%
Sales Q2Q%1.64%
Revenue Next Year-1.51%
Revenue Next 2Y2%
Revenue Next 3Y3.82%
Revenue Next 5Y5.14%
EBIT growth 1Y-0.9%
EBIT growth 3Y1.9%
EBIT growth 5Y-2.29%
EBIT Next Year158.47%
EBIT Next 3Y53.28%
EBIT Next 5Y37.33%
FCF growth 1Y-117.26%
FCF growth 3YN/A
FCF growth 5YN/A
OCF growth 1Y-23.29%
OCF growth 3Y20.16%
OCF growth 5Y12.87%
ALLETE INC / ALE FAQ
What is the fundamental rating for ALE stock?
ChartMill assigns a fundamental rating of 4 / 10 to ALE.
What is the valuation status for ALE stock?
ChartMill assigns a valuation rating of 2 / 10 to ALLETE INC (ALE). This can be considered as Overvalued.
What is the profitability of ALE stock?
ALLETE INC (ALE) has a profitability rating of 4 / 10.
What are the PE and PB ratios of ALLETE INC (ALE) stock?
The Price/Earnings (PE) ratio for ALLETE INC (ALE) is 21.26 and the Price/Book (PB) ratio is 1.37.
How sustainable is the dividend of ALLETE INC (ALE) stock?
The dividend rating of ALLETE INC (ALE) is 8 / 10 and the dividend payout ratio is 90.47%.