ALLETE INC (ALE) Stock Fundamental Analysis
NYSE:ALE - New York Stock Exchange, Inc. - US0185223007 - Common Stock - Currency: USD
Taking everything into account, ALE scores 4 out of 10 in our fundamental rating. 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 decent growth rate and is not valued too 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.
ALE had positive earnings in each of the past 5 years.
Each year in the past 5 years ALE had a positive operating cash flow.
1.2 Ratios
The Return On Assets of ALE (2.65%) is comparable to the rest of the industry.
ALE has a worse Return On Equity (6.30%) than 84.21% of its industry peers.
ALE has a worse Return On Invested Capital (2.30%) than 86.84% of its industry peers.
ALE had an Average Return On Invested Capital over the past 3 years of 2.33%. This is below the industry average of 4.94%.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 2.65% | ||
| ROE | 6.3% | ||
| ROIC | 2.3% |
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 has a Profit Margin of 11.72%. This is comparable to the rest of the industry: ALE outperforms 42.11% of its industry peers.
ALE's Profit Margin has declined in the last couple of years.
Looking at the Operating Margin, with a value of 10.47%, ALE is doing worse than 81.58% of the companies in the same industry.
ALE's Operating Margin has declined in the last couple of years.
The Gross Margin of ALE (91.55%) is better than 92.11% of its industry peers.
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 | 10.47% | ||
| PM (TTM) | 11.72% | ||
| GM | 91.55% |
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
With a Return on Invested Capital (ROIC) below the Cost of Capital (WACC), ALE is destroying value.
ALE has more shares outstanding than it did 1 year ago.
Compared to 5 years ago, ALE has more shares outstanding
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.
Looking at the Altman-Z score, with a value of 1.11, ALE is in the better half of the industry, outperforming 76.32% of the companies in the same industry.
The Debt to FCF ratio of ALE is 17.62, which is on the high side as it means it would take ALE, 17.62 years of fcf income to pay off all of its debts.
ALE has a better Debt to FCF ratio (17.62) than 78.95% of its industry peers.
ALE has a Debt/Equity ratio of 0.60. This is a neutral value indicating ALE is somewhat dependend on debt financing.
Looking at the Debt to Equity ratio, with a value of 0.60, ALE belongs to the top of the industry, outperforming 84.21% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.6 | ||
| Debt/FCF | 17.62 | ||
| Altman-Z | 1.11 |
ROIC/WACC0.32
WACC7.29%
2.3 Liquidity
ALE has a Current Ratio of 1.08. This is a normal value and indicates that ALE is financially healthy and should not expect problems in meeting its short term obligations.
ALE has a Current ratio of 1.08. This is in the better half of the industry: ALE outperforms 73.68% of its industry peers.
ALE has a Quick Ratio of 1.08. 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 (0.69) is comparable to the rest of the industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 1.08 | ||
| Quick Ratio | 0.69 |
3. Growth
3.1 Past
ALE shows a strong negative growth in Earnings Per Share. In the last year the EPS decreased by -27.91%.
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)-27.91%
EPS 3Y-1.36%
EPS 5Y-2.89%
EPS Q2Q%-2.25%
Revenue 1Y (TTM)-18.62%
Revenue growth 3Y2.53%
Revenue growth 5Y4.28%
Sales Q2Q%-9.41%
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 13.59% yearly.
Based on estimates for the next years, ALE will show a small growth in Revenue. The Revenue will grow by 6.04% on average per year.
EPS Next Y25.54%
EPS Next 2Y17.99%
EPS Next 3Y15.91%
EPS Next 5Y13.59%
Revenue Next Year2.9%
Revenue Next 2Y4.56%
Revenue Next 3Y5.26%
Revenue Next 5Y6.04%
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 accelerating.
When comparing the Revenue growth rate of the last years to the growth rate of the upcoming years, we see that the growth is accelerating.
4. Valuation
4.1 Price/Earnings Ratio
A Price/Earnings ratio of 21.15 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 73.68% of the companies listed in the same industry.
The average S&P500 Price/Earnings ratio is at 29.98. ALE is valued slightly cheaper when compared to this.
The Price/Forward Earnings ratio is 16.84, which indicates a correct valuation of ALE.
The rest of the industry has a similar Price/Forward Earnings ratio as ALE.
The average S&P500 Price/Forward Earnings ratio is at 22.66. ALE is valued slightly cheaper when compared to this.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 21.15 | ||
| Fwd PE | 16.84 |
4.2 Price Multiples
Based on the Enterprise Value to EBITDA ratio, ALE is valued a bit more expensive than 63.16% of the companies in the same industry.
Based on the Price/Free Cash Flow ratio, ALE is valued a bit cheaper than 65.79% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 37.09 | ||
| EV/EBITDA | 12.7 |
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.
ALE's earnings are expected to grow with 15.91% in the coming years. This may justify a more expensive valuation.
PEG (NY)0.83
PEG (5Y)N/A
EPS Next 2Y17.99%
EPS Next 3Y15.91%
5. Dividend
5.1 Amount
With a Yearly Dividend Yield of 4.46%, ALE is a good candidate for dividend investing.
ALE's Dividend Yield is rather good when compared to the industry average which is at 3.48. ALE pays more dividend than 89.47% of the companies in the same industry.
Compared to an average S&P500 Dividend Yield of 2.30, ALE pays a better dividend.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 4.46% |
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
90.80% 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.
DP90.8%
EPS Next 2Y17.99%
EPS Next 3Y15.91%
NYSE:ALE (3/3/2025, 1:39:16 PM)
65.55
-0.14 (-0.21%)
Chartmill FA Rating
GICS SectorUtilities
GICS IndustryGroupUtilities
GICS IndustryElectric Utilities
Earnings (Last)
Earnings (Next)
Inst Owners74.97%
Inst Owner Change0.6%
Ins Owners0.26%
Ins Owner Change3.26%
Market Cap3.79B
Analysts75
Price Target67.5 (2.97%)
Short Float %1.56%
Short Ratio2.44
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 4.46% |
Yearly Dividend2.82
Dividend Growth(5Y)3.68%
DP90.8%
Div Incr Years14
Div Non Decr Years19
Ex-Date
Surprises & Revisions
EPS beat(2)0
Avg EPS beat(2)-19.7%
Min EPS beat(2)-22.75%
Max EPS beat(2)-16.66%
EPS beat(4)0
Avg EPS beat(4)-22.57%
Min EPS beat(4)-35.87%
Max EPS beat(4)-15%
EPS beat(8)2
Avg EPS beat(8)3.07%
EPS beat(12)3
Avg EPS beat(12)-0.47%
EPS beat(16)5
Avg EPS beat(16)-1.82%
Revenue beat(2)1
Avg Revenue beat(2)-4.82%
Min Revenue beat(2)-12.76%
Max Revenue beat(2)3.11%
Revenue beat(4)1
Avg Revenue beat(4)-16.59%
Min Revenue beat(4)-35.83%
Max Revenue beat(4)3.11%
Revenue beat(8)3
Avg Revenue beat(8)-2.28%
Revenue beat(12)7
Avg Revenue beat(12)0.83%
Revenue beat(16)11
Avg Revenue beat(16)3.82%
PT rev (1m)-0.3%
PT rev (3m)-0.3%
EPS NQ rev (1m)0%
EPS NQ rev (3m)0%
EPS NY rev (1m)-1.11%
EPS NY rev (3m)-3.38%
Revenue NQ rev (1m)0%
Revenue NQ rev (3m)0%
Revenue NY rev (1m)0%
Revenue NY rev (3m)-7.16%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 21.15 | ||
| Fwd PE | 16.84 | ||
| P/S | 2.48 | ||
| P/FCF | 37.09 | ||
| P/OCF | 8.29 | ||
| P/B | 1.33 | ||
| P/tB | 1.41 | ||
| EV/EBITDA | 12.7 |
EPS(TTM)3.1
EY4.73%
EPS(NY)3.89
Fwd EY5.94%
FCF(TTM)1.77
FCFY2.7%
OCF(TTM)7.91
OCFY12.06%
SpS26.46
BVpS49.26
TBVpS46.57
PEG (NY)0.83
PEG (5Y)N/A
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 2.65% | ||
| ROE | 6.3% | ||
| ROCE | 2.52% | ||
| ROIC | 2.3% | ||
| ROICexc | 2.32% | ||
| ROICexgc | 2.37% | ||
| OM | 10.47% | ||
| PM (TTM) | 11.72% | ||
| GM | 91.55% | ||
| FCFM | 6.68% |
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 Turnover0.23
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.6 | ||
| Debt/FCF | 17.62 | ||
| Debt/EBITDA | 3.89 | ||
| Cap/Depr | 127.57% | ||
| Cap/Sales | 23.2% | ||
| Interest Coverage | 2.13 | ||
| Cash Conversion | 104.29% | ||
| Profit Quality | 57% | ||
| Current Ratio | 1.08 | ||
| Quick Ratio | 0.69 | ||
| Altman-Z | 1.11 |
F-Score5
WACC7.29%
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)-27.91%
EPS 3Y-1.36%
EPS 5Y-2.89%
EPS Q2Q%-2.25%
EPS Next Y25.54%
EPS Next 2Y17.99%
EPS Next 3Y15.91%
EPS Next 5Y13.59%
Revenue 1Y (TTM)-18.62%
Revenue growth 3Y2.53%
Revenue growth 5Y4.28%
Sales Q2Q%-9.41%
Revenue Next Year2.9%
Revenue Next 2Y4.56%
Revenue Next 3Y5.26%
Revenue Next 5Y6.04%
EBIT growth 1Y-11.5%
EBIT growth 3Y1.9%
EBIT growth 5Y-2.29%
EBIT Next Year156.28%
EBIT Next 3Y52.97%
EBIT Next 5Y43.96%
FCF growth 1Y-67.46%
FCF growth 3YN/A
FCF growth 5YN/A
OCF growth 1Y-21.9%
OCF growth 3Y20.16%
OCF growth 5Y12.87%