ALLETE INC (ALE)
US0185223007 - Common Stock
Taking everything into account, ALE scores 5 out of 10 in our fundamental rating. ALE was compared to 45 industry peers in the Electric Utilities industry. ALE has an average financial health and profitability rating. ALE has a correct valuation and a medium growth rate. ALE also has an excellent dividend rating. This makes ALE very considerable for dividend investing!
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
With an excellent Return On Assets value of 3.71%, ALE belongs to the best of the industry, outperforming 82.22% of the companies in the same industry.
ALE has a Return On Equity of 8.79%. This is comparable to the rest of the industry: ALE outperforms 55.56% of its industry peers.
ALE's Return On Invested Capital of 2.49% is on the low side compared to the rest of the industry. ALE is outperformed by 68.89% of its industry peers.
Measured over the past 3 years, the Average Return On Invested Capital for ALE is below the industry average of 4.42%.
The 3 year average ROIC (2.22%) for ALE is below the current ROIC(2.49%), indicating increased profibility in the last year.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 3.71% | ||
| ROE | 8.79% | ||
| ROIC | 2.49% |
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
With a decent Profit Margin value of 13.15%, ALE is doing good in the industry, outperforming 66.67% of the companies in the same industry.
ALE's Profit Margin has improved in the last couple of years.
The Operating Margin of ALE (9.62%) is worse than 84.44% of its industry peers.
ALE's Operating Margin has declined in the last couple of years.
The Gross Margin of ALE (74.81%) is better than 77.78% of its industry peers.
In the last couple of years the Gross Margin of ALE has declined.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 9.62% | ||
| PM (TTM) | 13.15% | ||
| GM | 74.81% |
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
ALE has an Altman-Z score of 1.14. This is a bad value and indicates that ALE is not financially healthy and even has some risk of bankruptcy.
ALE has a better Altman-Z score (1.14) than 80.00% of its industry peers.
ALE has a debt to FCF ratio of 5.71. This is a neutral value as ALE would need 5.71 years to pay back of all of its debts.
ALE's Debt to FCF ratio of 5.71 is amongst the best of the industry. ALE outperforms 84.44% 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.
ALE has a Debt to Equity ratio of 0.60. This is amongst the best in the industry. ALE outperforms 88.89% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.6 | ||
| Debt/FCF | 5.71 | ||
| Altman-Z | 1.14 |
ROIC/WACC0.34
WACC7.33%
2.3 Liquidity
ALE has a Current Ratio of 1.24. 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 1.24, ALE is in the better half of the industry, outperforming 71.11% of the companies in the same industry.
A Quick Ratio of 0.78 indicates that ALE may have some problems paying its short term obligations.
Looking at the Quick ratio, with a value of 0.78, ALE is in line with its industry, outperforming 55.56% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 1.24 | ||
| Quick Ratio | 0.78 |
3. Growth
3.1 Past
ALE shows a strong growth in Earnings Per Share. In the last year, the EPS has been growing by 23.56%, which is quite impressive.
The Earnings Per Share has been growing slightly by 5.18% on average over the past years.
The Revenue has grown by 19.68% in the past year. This is quite good.
ALE shows a small growth in Revenue. Measured over the last years, the Revenue has been growing by 4.64% yearly.
EPS 1Y (TTM)23.56%
EPS 3Y8.68%
EPS 5Y5.18%
EPS growth Q2Q1.14%
Revenue 1Y (TTM)19.68%
Revenue growth 3Y17.15%
Revenue growth 5Y4.64%
Revenue growth Q2Q-5.43%
3.2 Future
Based on estimates for the next years, ALE will show a small growth in Earnings Per Share. The EPS will grow by 4.23% on average per year.
ALE is expected to show a small growth in Revenue. In the coming years, the Revenue will grow by 1.57% yearly.
EPS Next Y-9.85%
EPS Next 2Y-0.8%
EPS Next 3Y1.92%
EPS Next 5Y4.23%
Revenue Next Year-1.73%
Revenue Next 2Y0.67%
Revenue Next 3Y1.74%
Revenue Next 5Y1.57%
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 stable.
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 13.94, the valuation of ALE can be described as correct.
68.89% of the companies in the same industry are more expensive than ALE, based on the Price/Earnings ratio.
When comparing the Price/Earnings ratio of ALE to the average of the S&P500 Index (25.25), we can say ALE is valued slightly cheaper.
Based on the Price/Forward Earnings ratio of 15.47, the valuation of ALE can be described as correct.
Compared to the rest of the industry, the Price/Forward Earnings ratio of ALE is on the same level as its industry peers.
ALE is valuated rather cheaply when we compare the Price/Forward Earnings ratio to 21.67, which is the current average of the S&P500 Index.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 13.94 | ||
| Fwd PE | 15.47 |
4.2 Price Multiples
60.00% of the companies in the same industry are cheaper than ALE, based on the Enterprise Value to EBITDA ratio.
84.44% of the companies in the same industry are more expensive than ALE, based on the Price/Free Cash Flow ratio.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 11.01 | ||
| EV/EBITDA | 11.78 |
4.3 Compensation for Growth
PEG (NY)N/A
PEG (5Y)2.69
EPS Next 2Y-0.8%
EPS Next 3Y1.92%
5. Dividend
5.1 Amount
ALE has a Yearly Dividend Yield of 4.82%, which is a nice return.
ALE's Dividend Yield is a higher than the industry average which is at 5.35.
ALE's Dividend Yield is rather good when compared to the S&P500 average which is at 2.45.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 4.82% |
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 Years13
Div Non Decr Years18
5.3 Sustainability
62.93% of the earnings are spent on dividend by ALE. This is not a sustainable payout ratio.
The dividend of ALE is growing around the same rate as the earnings are growing. If this keeps up the dividend growth is sustainable.
DP62.93%
EPS Next 2Y-0.8%
EPS Next 3Y1.92%
ALLETE INC
NYSE:ALE (4/24/2024, 7:04:00 PM)
After market: 59.96 0 (0%)59.96
+0.16 (+0.27%)
Chartmill FA Rating
GICS SectorUtilities
GICS IndustryGroupUtilities
GICS IndustryElectric Utilities
Earnings (Last)
Earnings (Next)
Inst Owners
Inst Owner Change
Ins Owners
Ins Owner Change
Market Cap3.46B
Analysts
Price Target
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 4.82% |
Dividend Growth(5Y)
DP
Div Incr Years
Div Non Decr Years
Ex-Date
Surprises & Revisions
EPS beat(2)
Avg EPS beat(2)
Min EPS beat(2)
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EPS beat(4)
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EPS beat(8)
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EPS beat(12)
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EPS beat(16)
Avg EPS beat(16)
Revenue beat(2)
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Min Revenue beat(2)
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Revenue beat(4)
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Revenue beat(8)
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Revenue beat(12)
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Revenue beat(16)
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PT rev (1m)
PT rev (3m)
EPS NQ rev (1m)
EPS NQ rev (3m)
EPS NY rev (1m)
EPS NY rev (3m)
Revenue NQ rev (1m)
Revenue NQ rev (3m)
Revenue NY rev (1m)
Revenue NY rev (3m)
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 13.94 | ||
| Fwd PE | 15.47 | ||
| P/S | |||
| P/FCF | |||
| P/OCF | |||
| P/B | |||
| P/tB | |||
| EV/EBITDA |
EPS(TTM)
EY
EPS(NY)
Fwd EY
FCF(TTM)
FCFY
OCF(TTM)
OCFY
SpS
BVpS
TBVpS
PEG (NY)N/A
PEG (5Y)2.69
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 3.71% | ||
| ROE | 8.79% | ||
| ROCE | |||
| ROIC | |||
| ROICexc | |||
| ROICexgc | |||
| OM | 9.62% | ||
| PM (TTM) | 13.15% | ||
| GM | 74.81% | ||
| FCFM |
ROA(3y)
ROA(5y)
ROE(3y)
ROE(5y)
ROIC(3y)
ROIC(5y)
ROICexc(3y)
ROICexc(5y)
ROICexgc(3y)
ROICexgc(5y)
ROCE(3y)
ROCE(5y)
ROICexcg growth 3Y
ROICexcg growth 5Y
ROICexc growth 3Y
ROICexc growth 5Y
OM growth 3Y
OM growth 5Y
PM growth 3Y
PM growth 5Y
GM growth 3Y
GM growth 5Y
F-Score
Asset Turnover0.28
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.6 | ||
| Debt/FCF | |||
| Debt/EBITDA | |||
| Cap/Depr | |||
| Cap/Sales | |||
| Interest Coverage | |||
| Cash Conversion | |||
| Profit Quality | |||
| Current Ratio | 1.24 | ||
| Quick Ratio | 0.78 | ||
| Altman-Z |
F-Score
WACC
ROIC/WACC
Cap/Depr(3y)
Cap/Depr(5y)
Cap/Sales(3y)
Cap/Sales(5y)
Profit Quality(3y)
Profit Quality(5y)
Growth
EPS 1Y (TTM)23.56%
EPS 3Y8.68%
EPS 5Y
EPS growth Q2Q
EPS Next Y-9.85%
EPS Next 2Y
EPS Next 3Y
EPS Next 5Y
Revenue 1Y (TTM)19.68%
Revenue growth 3Y17.15%
Revenue growth 5Y
Revenue growth Q2Q
Revenue Next Year
Revenue Next 2Y
Revenue Next 3Y
Revenue Next 5Y
EBIT growth 1Y
EBIT growth 3Y
EBIT growth 5Y
EBIT Next Year
EBIT Next 3Y
EBIT Next 5Y
FCF growth 1Y
FCF growth 3Y
FCF growth 5Y
OCF growth 1Y
OCF growth 3Y
OCF growth 5Y