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 valuation in line with the averages, but it does not seem to be growing. Finally ALE also has an excellent dividend rating.
1. Profitability
1.1 Basic Checks
ALE had positive earnings in the past year.
ALE had a positive operating cash flow in the past year.
In the past 5 years ALE has always 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 of 2.69%. This is comparable to the rest of the industry: ALE outperforms 42.55% of its industry peers.
Looking at the Return On Equity, with a value of 6.44%, ALE is doing worse than 89.36% of the companies in the same industry.
ALE has a worse Return On Invested Capital (2.34%) than 91.49% of its industry peers.
Measured over the past 3 years, the Average Return On Invested Capital for ALE is significantly below the industry average of 38.54%.
The last Return On Invested Capital (2.34%) for ALE is above the 3 year average (2.33%), which is a sign of increasing profitability.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 2.69% | ||
| ROE | 6.44% | ||
| ROIC | 2.34% |
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
With a Profit Margin value of 12.10%, ALE perfoms like the industry average, outperforming 42.55% of the companies in the same industry.
ALE's Profit Margin has declined in the last couple of years.
Looking at the Operating Margin, with a value of 10.86%, ALE is doing worse than 85.11% of the companies in the same industry.
In the last couple of years the Operating Margin of ALE has declined.
The Gross Margin of ALE (91.50%) is better than 95.74% 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 | 10.86% | ||
| PM (TTM) | 12.1% | ||
| GM | 91.5% |
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.
The number of shares outstanding for ALE has been increased compared to 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 1.10, we must say that ALE is in the distress zone and has some risk of bankruptcy.
ALE has a Altman-Z score of 1.10. This is in the better half of the industry: ALE outperforms 68.09% of its industry peers.
ALE has a debt to FCF ratio of 32.94. This is a negative value and a sign of low solvency as ALE would need 32.94 years to pay back of all of its debts.
ALE has a better Debt to FCF ratio (32.94) than 74.47% of its industry peers.
A Debt/Equity ratio of 0.64 indicates that ALE is somewhat dependend on debt financing.
ALE has a Debt to Equity ratio of 0.64. This is in the better half of the industry: ALE outperforms 70.21% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.64 | ||
| Debt/FCF | 32.94 | ||
| Altman-Z | 1.1 |
ROIC/WACC0.32
WACC7.32%
2.3 Liquidity
A Current Ratio of 1.26 indicates that ALE should not have too much problems paying its short term obligations.
Looking at the Current ratio, with a value of 1.26, ALE is in the better half of the industry, outperforming 72.34% of the companies in the same industry.
ALE has a Quick Ratio of 1.26. This is a bad value and indicates that ALE is not financially healthy enough and could expect problems in meeting its short term obligations.
Looking at the Quick ratio, with a value of 0.81, ALE is in line with its industry, outperforming 55.32% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 1.26 | ||
| Quick Ratio | 0.81 |
3. Growth
3.1 Past
The earnings per share for ALE have decreased strongly by -23.32% 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.
Looking at the last year, ALE shows a very negative growth in Revenue. The Revenue has decreased by -11.15% in the last 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)-23.32%
EPS 3Y-1.36%
EPS 5Y-2.89%
EPS Q2Q%10.23%
Revenue 1Y (TTM)-11.15%
Revenue growth 3Y2.53%
Revenue growth 5Y4.28%
Sales Q2Q%-0.77%
3.2 Future
The Earnings Per Share is expected to grow by 11.96% on average over the next years. This is quite good.
The Revenue is expected to grow by 5.14% on average over the next years.
EPS Next Y25.22%
EPS Next 2Y17.21%
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
With a Price/Earnings ratio of 20.37, ALE is valued on the expensive side.
Based on the Price/Earnings ratio, ALE is valued a bit more expensive than the industry average as 70.21% of the companies are valued more cheaply.
Compared to an average S&P500 Price/Earnings ratio of 27.29, ALE is valued a bit cheaper.
With a Price/Forward Earnings ratio of 15.26, ALE is valued correctly.
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 (21.74), we can say ALE is valued slightly cheaper.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 20.37 | ||
| Fwd PE | 15.26 |
4.2 Price Multiples
Based on the Enterprise Value to EBITDA ratio, ALE is valued a bit more expensive than 68.09% of the companies in the same industry.
Compared to the rest of the industry, the Price/Free Cash Flow ratio of ALE indicates a somewhat cheap valuation: ALE is cheaper than 74.47% of the companies listed in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 64.37 | ||
| EV/EBITDA | 12.48 |
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.
A more expensive valuation may be justified as ALE's earnings are expected to grow with 15.10% in the coming years.
PEG (NY)0.81
PEG (5Y)N/A
EPS Next 2Y17.21%
EPS Next 3Y15.1%
5. Dividend
5.1 Amount
ALE has a Yearly Dividend Yield of 4.50%, which is a nice return.
Compared to an average industry Dividend Yield of 3.63, ALE pays a bit more dividend than its industry peers.
ALE's Dividend Yield is rather good when compared to the S&P500 average which is at 2.37.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 4.5% |
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
ALE pays out 89.06% of its income as dividend. This is not a sustainable payout ratio.
The dividend of ALE is growing, but earnings are growing more, so the dividend growth is sustainable.
DP89.06%
EPS Next 2Y17.21%
EPS Next 3Y15.1%
64.97
+0.11 (+0.17%)
Chartmill FA Rating
GICS SectorUtilities
GICS IndustryGroupUtilities
GICS IndustryElectric Utilities
Earnings (Last)
Earnings (Next)
Inst Owners74.61%
Inst Owner Change0%
Ins Owners0.27%
Ins Owner Change5.87%
Market Cap3.77B
Analysts77.14
Price Target67.5 (3.89%)
Short Float %2.18%
Short Ratio3.54
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 4.5% |
Yearly Dividend2.82
Dividend Growth(5Y)3.68%
DP89.06%
Div Incr Years14
Div Non Decr Years19
Ex-Date
Surprises & Revisions
EPS beat(2)0
Avg EPS beat(2)-15.2%
Min EPS beat(2)-22.75%
Max EPS beat(2)-7.65%
EPS beat(4)0
Avg EPS beat(4)-20.73%
Min EPS beat(4)-35.87%
Max EPS beat(4)-7.65%
EPS beat(8)2
Avg EPS beat(8)3.87%
EPS beat(12)3
Avg EPS beat(12)-0.57%
EPS beat(16)5
Avg EPS beat(16)-1.69%
Revenue beat(2)0
Avg Revenue beat(2)-12.96%
Min Revenue beat(2)-13.16%
Max Revenue beat(2)-12.76%
Revenue beat(4)1
Avg Revenue beat(4)-14.66%
Min Revenue beat(4)-35.83%
Max Revenue beat(4)3.11%
Revenue beat(8)2
Avg Revenue beat(8)-9.14%
Revenue beat(12)6
Avg Revenue beat(12)-0.89%
Revenue beat(16)10
Avg Revenue beat(16)2.77%
PT rev (1m)0%
PT rev (3m)0%
EPS NQ rev (1m)0%
EPS NQ rev (3m)4.65%
EPS NY rev (1m)-2.45%
EPS NY rev (3m)-0.26%
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 | 20.37 | ||
| Fwd PE | 15.26 | ||
| P/S | 2.47 | ||
| P/FCF | 64.37 | ||
| P/OCF | 7.42 | ||
| P/B | 1.31 | ||
| P/tB | 1.39 | ||
| EV/EBITDA | 12.48 |
EPS(TTM)3.19
EY4.91%
EPS(NY)4.26
Fwd EY6.56%
FCF(TTM)1.01
FCFY1.55%
OCF(TTM)8.75
OCFY13.47%
SpS26.34
BVpS49.45
TBVpS46.77
PEG (NY)0.81
PEG (5Y)N/A
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 2.69% | ||
| ROE | 6.44% | ||
| ROCE | 2.56% | ||
| ROIC | 2.34% | ||
| ROICexc | 2.37% | ||
| ROICexgc | 2.43% | ||
| OM | 10.86% | ||
| PM (TTM) | 12.1% | ||
| GM | 91.5% | ||
| FCFM | 3.83% |
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 Turnover0.22
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.64 | ||
| Debt/FCF | 32.94 | ||
| Debt/EBITDA | 4.08 | ||
| Cap/Depr | 158.55% | ||
| Cap/Sales | 29.39% | ||
| Interest Coverage | 2.23 | ||
| Cash Conversion | 113.01% | ||
| Profit Quality | 31.67% | ||
| Current Ratio | 1.26 | ||
| Quick Ratio | 0.81 | ||
| Altman-Z | 1.1 |
F-Score5
WACC7.32%
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)-23.32%
EPS 3Y-1.36%
EPS 5Y-2.89%
EPS Q2Q%10.23%
EPS Next Y25.22%
EPS Next 2Y17.21%
EPS Next 3Y15.1%
EPS Next 5Y11.96%
Revenue 1Y (TTM)-11.15%
Revenue growth 3Y2.53%
Revenue growth 5Y4.28%
Sales Q2Q%-0.77%
Revenue Next Year-1.51%
Revenue Next 2Y2%
Revenue Next 3Y3.82%
Revenue Next 5Y5.14%
EBIT growth 1Y-7.84%
EBIT growth 3Y1.9%
EBIT growth 5Y-2.29%
EBIT Next Year158.47%
EBIT Next 3Y53.28%
EBIT Next 5Y37.33%
FCF growth 1Y-31.42%
FCF growth 3YN/A
FCF growth 5YN/A
OCF growth 1Y59.25%
OCF growth 3Y20.16%
OCF growth 5Y12.87%