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 46 industry peers in the Electric Utilities industry. ALE has only an average score on both its financial health and profitability. ALE has a valuation in line with the averages, but it does not seem to be growing. 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.
In the past 5 years ALE has always been profitable.
Each year in the past 5 years ALE had a positive operating cash flow.
1.2 Ratios
ALE has a Return On Assets (2.67%) which is comparable to the rest of the industry.
The Return On Equity of ALE (6.36%) is worse than 83.78% of its industry peers.
ALE has a Return On Invested Capital of 2.23%. This is amonst the worse of the industry: ALE underperforms 86.49% of its industry peers.
ALE had an Average Return On Invested Capital over the past 3 years of 2.22%. This is below the industry average of 4.60%.
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
ALE's Profit Margin of 11.49% is in line compared to the rest of the industry. ALE outperforms 40.54% of its industry peers.
ALE's Profit Margin has improved in the last couple of years.
The Operating Margin of ALE (10.53%) is worse than 81.08% 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 91.89% 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
With a Return on Invested Capital (ROIC) below the Cost of Capital (WACC), 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.
ALE has a better debt/assets ratio than last year.
2.2 Solvency
Based on the Altman-Z score of 1.14, we must say that ALE is in the distress zone and has some risk of bankruptcy.
ALE's Altman-Z score of 1.14 is fine compared to the rest of the industry. ALE outperforms 75.68% 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's Debt to FCF ratio of 15.51 is amongst the best of the industry. ALE outperforms 86.49% 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.
Looking at the Debt to Equity ratio, with a value of 0.62, ALE belongs to the top of the industry, outperforming 83.78% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.62 | ||
| Debt/FCF | 15.51 | ||
| Altman-Z | 1.14 |
ROIC/WACC0.3
WACC7.4%
2.3 Liquidity
A Current Ratio of 1.45 indicates that ALE should not have too much problems paying its short term obligations.
ALE has a Current ratio of 1.45. This is in the better half of the industry: ALE outperforms 78.38% of its industry peers.
A Quick Ratio of 0.95 indicates that ALE may have some problems paying its short term obligations.
ALE has a better Quick ratio (0.95) than 64.86% 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%.
The Earnings Per Share has been growing slightly by 5.18% on average over the past years.
Looking at the last year, ALE shows a very negative growth in Revenue. The Revenue has decreased by -17.62% in the last year.
ALE shows a small growth in Revenue. Measured over the last years, the Revenue has been growing by 4.64% yearly.
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.
ALE is expected to show a small growth in Revenue. In the coming years, the Revenue will grow by 2.36% yearly.
EPS Next Y-12.27%
EPS Next 2Y-3.22%
EPS Next 3Y0.81%
EPS Next 5Y3.72%
Revenue Next Year-11.14%
Revenue Next 2Y-4.38%
Revenue Next 3Y-0.96%
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.
The Revenue growth rate is decreasing: in the next years the growth will be less than in the last years.
4. Valuation
4.1 Price/Earnings Ratio
Based on the Price/Earnings ratio of 21.02, the valuation of ALE can be described as rather expensive.
Based on the Price/Earnings ratio, ALE is valued a bit more expensive than the industry average as 75.68% of the companies are valued more cheaply.
Compared to an average S&P500 Price/Earnings ratio of 28.51, ALE is valued a bit cheaper.
A Price/Forward Earnings ratio of 16.28 indicates a correct valuation of ALE.
The rest of the industry has a similar Price/Forward Earnings ratio as ALE.
ALE is valuated cheaply when we compare the Price/Forward Earnings ratio to 93.88, which is the current average of the S&P500 Index.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 21.02 | ||
| Fwd PE | 16.28 |
4.2 Price Multiples
The rest of the industry has a similar Enterprise Value to EBITDA ratio as ALE.
Based on the Price/Free Cash Flow ratio, ALE is valued cheaply inside the industry as 81.08% of the companies are valued more expensively.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 32.92 | ||
| EV/EBITDA | 12.54 |
4.3 Compensation for Growth
PEG (NY)N/A
PEG (5Y)4.06
EPS Next 2Y-3.22%
EPS Next 3Y0.81%
5. Dividend
5.1 Amount
With a Yearly Dividend Yield of 4.29%, ALE is a good candidate for dividend investing.
Compared to an average industry Dividend Yield of 3.64, ALE pays a better dividend. On top of this ALE pays more dividend than 86.49% of the companies listed in the same industry.
Compared to an average S&P500 Dividend Yield of 2.27, ALE pays a better dividend.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 4.29% |
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.
ALE's earnings are growing slower than its dividend. This means the dividend growth is not sustainable.
DP89.35%
EPS Next 2Y-3.22%
EPS Next 3Y0.81%
ALLETE INC
NYSE:ALE (1/31/2025, 3:00:52 PM)
65.59
-0.09 (-0.14%)
Chartmill FA Rating
GICS SectorUtilities
GICS IndustryGroupUtilities
GICS IndustryElectric Utilities
Earnings (Last)
Earnings (Next)
Inst Owners77.1%
Inst Owner Change0.03%
Ins Owners0.26%
Ins Owner Change0%
Market Cap3.79B
Analysts73.33
Price Target67.7 (3.22%)
Short Float %1.86%
Short Ratio3.42
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 4.29% |
Yearly Dividend2.71
Dividend Growth(5Y)3.86%
DP89.35%
Div Incr Years14
Div Non Decr Years19
Ex-DateN/A
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)0%
PT rev (3m)2.96%
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)0.51%
Revenue NY rev (3m)0.51%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 21.02 | ||
| Fwd PE | 16.28 | ||
| P/S | 2.42 | ||
| P/FCF | 32.92 | ||
| P/OCF | 8.77 | ||
| P/B | 1.34 | ||
| P/tB | 1.42 | ||
| EV/EBITDA | 12.54 |
EPS(TTM)3.12
EY4.76%
EPS(NY)4.03
Fwd EY6.14%
FCF(TTM)1.99
FCFY3.04%
OCF(TTM)7.48
OCFY11.41%
SpS27.11
BVpS48.97
TBVpS46.28
PEG (NY)N/A
PEG (5Y)4.06
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 | 1.14 |
F-Score5
WACC7.4%
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-11.14%
Revenue Next 2Y-4.38%
Revenue Next 3Y-0.96%
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%