ALLETE INC (ALE) Stock Fundamental Analysis
USA - NYSE:ALE - US0185223007 - Common Stock
67.43 USD
+0.11 (+0.16%)
67.43 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 does not seem to be growing, but still is valued expensively. 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.
Each year in the past 5 years ALE has been profitable.
Each year in the past 5 years ALE had a positive operating cash flow.
1.2 Ratios
With a Return On Assets value of 2.66%, ALE perfoms like the industry average, outperforming 51.06% of the companies in the same industry.
Looking at the Return On Equity, with a value of 6.42%, ALE is doing worse than 80.85% of the companies in the same industry.
With a Return On Invested Capital value of 2.15%, ALE is not doing good in the industry: 89.36% of the companies in the same industry are doing better.
Measured over the past 3 years, the Average Return On Invested Capital 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
ALE's Profit Margin of 11.98% 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.
ALE has a Operating Margin of 10.08%. This is amonst the worse of the industry: ALE underperforms 82.98% of its industry peers.
In the last couple of years the Operating Margin of ALE has declined.
ALE has a better Gross Margin (92.03%) than 95.74% of its industry peers.
ALE's Gross Margin has been stable in the last couple of years.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 10.08% | ||
| 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
The Return on Invested Capital (ROIC) is below the Cost of Capital (WACC), so ALE is destroying value.
Compared to 1 year ago, ALE has more shares outstanding
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 1.11. 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 1.11, ALE is doing good in the industry, outperforming 63.83% of the companies in the same industry.
A Debt/Equity ratio of 0.68 indicates that ALE is somewhat dependend on debt financing.
ALE has a better Debt to Equity ratio (0.68) than 68.09% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.68 | ||
| Debt/FCF | N/A | ||
| Altman-Z | 1.11 |
ROIC/WACC0.3
WACC7.2%
2.3 Liquidity
ALE has a Current Ratio of 1.34. 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 (1.34) is better than 78.72% of its industry peers.
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 | 1.34 | ||
| Quick Ratio | 0.81 |
3. Growth
3.1 Past
ALE shows a slight negative growth in Earnings Per Share. In the last year, the EPS has decreased by -8.65%.
The Earnings Per Share has been decreasing by -2.89% on average over the past years.
The Revenue for ALE has decreased by -18.62% in the past year. This is quite bad
Measured over the past years, ALE shows a small growth in Revenue. The Revenue has been growing by 4.28% on average per year.
EPS 1Y (TTM)-8.65%
EPS 3Y-1.36%
EPS 5Y-2.89%
EPS Q2Q%-41.03%
Revenue 1Y (TTM)-18.62%
Revenue growth 3Y2.53%
Revenue growth 5Y4.28%
Sales Q2Q%-7.91%
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.
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 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.
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
Based on the Price/Earnings ratio of 23.66, the valuation of ALE can be described as rather expensive.
82.98% of the companies in the same industry are cheaper than ALE, based on the Price/Earnings ratio.
ALE's Price/Earnings ratio indicates a similar valuation than the S&P500 average which is at 26.06.
ALE is valuated correctly with a Price/Forward Earnings ratio of 16.73.
Compared to the rest of the industry, the Price/Forward Earnings ratio of ALE is on the same level as its industry peers.
When comparing the Price/Forward Earnings ratio of ALE to the average of the S&P500 Index (32.73), we can say ALE is valued slightly cheaper.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 23.66 | ||
| Fwd PE | 16.73 |
4.2 Price Multiples
68.09% of the companies in the same industry are cheaper than ALE, based on the Enterprise Value to EBITDA ratio.
| 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.
A more expensive valuation may be justified as ALE's earnings are expected to grow with 15.10% in the coming years.
PEG (NY)1.25
PEG (5Y)N/A
EPS Next 2Y14.02%
EPS Next 3Y15.1%
5. Dividend
5.1 Amount
ALE has a Yearly Dividend Yield of 4.34%, which is a nice return.
ALE's Dividend Yield is rather good when compared to the industry average which is at 3.23. ALE pays more dividend than 87.23% of the companies in the same industry.
ALE's Dividend Yield is rather good when compared to the S&P500 average which is at 2.36.
| 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 been paying a dividend for at least 10 years, so it has 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%
67.43
+0.11 (+0.16%)
Chartmill FA Rating
GICS SectorUtilities
GICS IndustryGroupUtilities
GICS IndustryElectric Utilities
Earnings (Last)
Earnings (Next)
Inst Owners76.96%
Inst Owner Change-0.14%
Ins Owners0.27%
Ins Owner Change2.7%
Market Cap3.91B
Revenue(TTM)1.53B
Net Income(TTM)183.60M
Analysts80
Price Target70.67 (4.8%)
Short Float %1.51%
Short Ratio1.28
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 | 23.66 | ||
| Fwd PE | 16.73 | ||
| P/S | 2.55 | ||
| P/FCF | N/A | ||
| P/OCF | 9.1 | ||
| P/B | 1.37 | ||
| P/tB | 1.45 | ||
| EV/EBITDA | 13.16 |
EPS(TTM)2.85
EY4.23%
EPS(NY)4.03
Fwd EY5.98%
FCF(TTM)-0.92
FCFYN/A
OCF(TTM)7.41
OCFY10.99%
SpS26.4
BVpS49.31
TBVpS46.63
PEG (NY)1.25
PEG (5Y)N/A
Graham Number56.23
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
WACC7.2%
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)-8.65%
EPS 3Y-1.36%
EPS 5Y-2.89%
EPS Q2Q%-41.03%
EPS Next Y18.92%
EPS Next 2Y14.02%
EPS Next 3Y15.1%
EPS Next 5Y11.96%
Revenue 1Y (TTM)-18.62%
Revenue growth 3Y2.53%
Revenue growth 5Y4.28%
Sales Q2Q%-7.91%
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 23.66 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%.