ALLETE INC (ALE) Stock Fundamental Analysis
NYSE:ALE - New York Stock Exchange, Inc. - US0185223007 - Common Stock - Currency: USD
Taking everything into account, ALE scores 5 out of 10 in our fundamental rating. ALE was compared to 46 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. 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.
ALE had a positive operating cash flow in each of the past 5 years.
1.2 Ratios
ALE has a Return On Assets of 2.65%. This is comparable to the rest of the industry: ALE outperforms 56.52% of its industry peers.
Looking at the Return On Equity, with a value of 6.30%, ALE is doing worse than 69.57% of the companies in the same industry.
With a Return On Invested Capital value of 2.30%, ALE is not doing good in the industry: 76.09% 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 4.69%.
| 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
With a Profit Margin value of 11.72%, ALE perfoms like the industry average, outperforming 52.17% of the companies in the same industry.
In the last couple of years the Profit Margin of ALE has declined.
With a Operating Margin value of 10.47%, ALE is not doing good in the industry: 65.22% of the companies in the same industry are doing better.
In the last couple of years the Operating Margin of ALE has declined.
Looking at the Gross Margin, with a value of 91.55%, ALE belongs to the top of the industry, outperforming 93.48% 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 | 10.47% | ||
| 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.
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.
The debt/assets ratio for ALE has been reduced compared to a year ago.
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.
The Altman-Z score of ALE (1.11) is better than 80.43% of its industry peers.
ALE has a debt to FCF ratio of 17.62. This is a negative value and a sign of low solvency as ALE would need 17.62 years to pay back of all of its debts.
ALE's Debt to FCF ratio of 17.62 is amongst the best of the industry. ALE outperforms 86.96% 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.
The Debt to Equity ratio of ALE (0.60) is better than 86.96% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.6 | ||
| Debt/FCF | 17.62 | ||
| Altman-Z | 1.11 |
ROIC/WACC0.32
WACC7.28%
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.
Looking at the Current ratio, with a value of 1.08, ALE belongs to the top of the industry, outperforming 80.43% of the companies in the same industry.
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.
ALE has a Quick ratio of 0.69. This is in the better half of the industry: ALE outperforms 63.04% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 1.08 | ||
| Quick Ratio | 0.69 |
3. Growth
3.1 Past
The earnings per share for ALE have decreased strongly by -27.91% in the last year.
The Earnings Per Share has been decreasing by -2.89% on average over the past years.
Looking at the last year, ALE shows a very negative growth in Revenue. The Revenue has decreased by -18.62% in the last year.
The Revenue has been growing slightly by 4.28% on average over the past years.
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
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 Y24.68%
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
A Price/Earnings ratio of 21.03 indicates a rather expensive valuation of ALE.
ALE's Price/Earnings ratio is in line with the industry average.
ALE's Price/Earnings ratio indicates a valuation a bit cheaper than the S&P500 average which is at 28.79.
ALE is valuated correctly with a Price/Forward Earnings ratio of 16.87.
Compared to the rest of the industry, the Price/Forward Earnings ratio of ALE indicates a somewhat cheap valuation: ALE is cheaper than 63.04% of the companies listed in the same industry.
When comparing the Price/Forward Earnings ratio of ALE to the average of the S&P500 Index (21.38), we can say ALE is valued slightly cheaper.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 21.03 | ||
| Fwd PE | 16.87 |
4.2 Price Multiples
Compared to the rest of the industry, the Enterprise Value to EBITDA ratio of ALE is on the same level as its industry peers.
Compared to the rest of the industry, the Price/Free Cash Flow ratio of ALE indicates a somewhat cheap valuation: ALE is cheaper than 76.09% of the companies listed in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 36.97 | ||
| EV/EBITDA | 12.67 |
4.3 Compensation for Growth
ALE's 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)0.85
PEG (5Y)N/A
EPS Next 2Y17.21%
EPS Next 3Y15.1%
5. Dividend
5.1 Amount
ALE has a Yearly Dividend Yield of 4.47%, which is a nice return.
ALE's Dividend Yield is rather good when compared to the industry average which is at 3.46. ALE pays more dividend than 82.61% of the companies in the same industry.
ALE's Dividend Yield is rather good when compared to the S&P500 average which is at 2.51.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 4.47% |
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 90.80% 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.
DP90.8%
EPS Next 2Y17.21%
EPS Next 3Y15.1%
65.19
-0.1 (-0.15%)
Chartmill FA Rating
GICS SectorUtilities
GICS IndustryGroupUtilities
GICS IndustryElectric Utilities
Earnings (Last)
Earnings (Next)
Inst Owners74.97%
Inst Owner Change0.33%
Ins Owners0.26%
Ins Owner Change3.3%
Market Cap3.78B
Analysts75
Price Target67.5 (3.54%)
Short Float %1.51%
Short Ratio2.42
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 4.47% |
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%
PT rev (3m)-0.3%
EPS NQ rev (1m)-16.13%
EPS NQ rev (3m)-16.13%
EPS NY rev (1m)-0.69%
EPS NY rev (3m)-4.05%
Revenue NQ rev (1m)0%
Revenue NQ rev (3m)0%
Revenue NY rev (1m)-4.28%
Revenue NY rev (3m)-11.14%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 21.03 | ||
| Fwd PE | 16.87 | ||
| P/S | 2.47 | ||
| P/FCF | 36.97 | ||
| P/OCF | 8.27 | ||
| P/B | 1.33 | ||
| P/tB | 1.4 | ||
| EV/EBITDA | 12.67 |
EPS(TTM)3.1
EY4.76%
EPS(NY)3.86
Fwd EY5.93%
FCF(TTM)1.76
FCFY2.7%
OCF(TTM)7.89
OCFY12.1%
SpS26.39
BVpS49.14
TBVpS46.46
PEG (NY)0.85
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
WACC7.28%
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 Y24.68%
EPS Next 2Y17.21%
EPS Next 3Y15.1%
EPS Next 5Y11.96%
Revenue 1Y (TTM)-18.62%
Revenue growth 3Y2.53%
Revenue growth 5Y4.28%
Sales Q2Q%-9.41%
Revenue Next Year-1.51%
Revenue Next 2Y2%
Revenue Next 3Y3.82%
Revenue Next 5Y5.14%
EBIT growth 1Y-11.5%
EBIT growth 3Y1.9%
EBIT growth 5Y-2.29%
EBIT Next Year158.47%
EBIT Next 3Y53.28%
EBIT Next 5Y37.33%
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%