ALLETE INC (ALE) Stock Fundamental Analysis
NYSE:ALE - US0185223007 - Common Stock
64.33 USD
-0.27 (-0.42%)
64.33 USD
0 (0%)
Overall ALE gets a fundamental rating of 3 out of 10. We evaluated ALE against 47 industry peers in the Electric Utilities industry. While ALE is still in line with the averages on profitability rating, there are concerns on its financial health. ALE is valued expensive and 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.
In the past year ALE had a positive cash flow from operations.
In the past 5 years ALE has always been profitable.
ALE had a positive operating cash flow in each of the past 5 years.
1.2 Ratios
With a Return On Assets value of 2.66%, ALE perfoms like the industry average, outperforming 44.68% of the companies in the same industry.
With a Return On Equity value of 6.42%, ALE is not doing good in the industry: 85.11% of the companies in the same industry are doing better.
With a Return On Invested Capital value of 2.15%, ALE is not doing good in the industry: 89.36% of the companies in the same industry are doing better.
ALE had an Average Return On Invested Capital over the past 3 years of 2.33%. This is below the industry average of 5.03%.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 2.66% | ||
| ROE | 6.42% | ||
| ROIC | 2.15% |
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 11.98%. This is comparable to the rest of the industry: ALE outperforms 40.43% of its industry peers.
In the last couple of years the Profit Margin of ALE has declined.
ALE has a worse Operating Margin (10.08%) than 85.11% of its industry peers.
In the last couple of years the Operating Margin of ALE has declined.
ALE's Gross Margin of 92.03% is amongst the best of the industry. ALE outperforms 95.74% of its industry peers.
ALE's Gross Margin has been stable in the last couple of years.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 10.08% | ||
| PM (TTM) | 11.98% | ||
| GM | 92.03% |
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
ALE has more shares outstanding than it did 5 years ago.
Compared to 1 year ago, ALE has an improved debt to assets ratio.
2.2 Solvency
ALE has an Altman-Z score of 1.08. This is a bad value and indicates that ALE is not financially healthy and even has some risk of bankruptcy.
Looking at the Altman-Z score, with a value of 1.08, ALE is in the better half of the industry, outperforming 65.96% of the companies in the same industry.
A Debt/Equity ratio of 0.68 indicates that ALE is somewhat dependend on debt financing.
Looking at the Debt to Equity ratio, with a value of 0.68, ALE is in the better half of the industry, outperforming 68.09% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.68 | ||
| Debt/FCF | N/A | ||
| Altman-Z | 1.08 |
ROIC/WACC0.3
WACC7.25%
2.3 Liquidity
ALE has a Current Ratio of 1.34. 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 1.34. This is in the better half of the industry: ALE outperforms 74.47% of its industry peers.
A Quick Ratio of 0.81 indicates that ALE may have some problems paying its short term obligations.
The Quick ratio of ALE (0.81) is comparable to the rest of the industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 1.34 | ||
| Quick Ratio | 0.81 |
3. Growth
3.1 Past
ALE shows a strong negative growth in Earnings Per Share. In the last year the EPS decreased by -17.23%.
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.
The Revenue has decreased by -0.44% in the past year.
The Revenue has been growing slightly by 4.28% on average over the past years.
EPS 1Y (TTM)-17.23%
EPS 3Y-1.36%
EPS 5Y-2.89%
EPS Q2Q%-3.51%
Revenue 1Y (TTM)-0.44%
Revenue growth 3Y2.53%
Revenue growth 5Y4.28%
Sales Q2Q%1.64%
3.2 Future
The Earnings Per Share is expected to grow by 11.96% on average over the next years. This is quite good.
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 Y18.92%
EPS Next 2Y14.02%
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
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 stable.
4. Valuation
4.1 Price/Earnings Ratio
With a Price/Earnings ratio of 20.29, ALE is valued on the expensive side.
Based on the Price/Earnings ratio, ALE is valued a bit more expensive than 68.09% of the companies in the same industry.
Compared to an average S&P500 Price/Earnings ratio of 27.14, ALE is valued a bit cheaper.
With a Price/Forward Earnings ratio of 15.96, ALE is valued correctly.
The rest of the industry has a similar Price/Forward Earnings ratio as ALE.
When comparing the Price/Forward Earnings ratio of ALE to the average of the S&P500 Index (22.80), we can say ALE is valued slightly cheaper.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 20.29 | ||
| Fwd PE | 15.96 |
4.2 Price Multiples
Compared to the rest of the industry, the Enterprise Value to EBITDA ratio of ALE indicates a slightly more expensive valuation: ALE is more expensive than 63.83% of the companies listed in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | N/A | ||
| EV/EBITDA | 12.79 |
4.3 Compensation for Growth
ALE's PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates a correct valuation of the company.
ALE's earnings are expected to grow with 15.10% in the coming years. This may justify a more expensive valuation.
PEG (NY)1.07
PEG (5Y)N/A
EPS Next 2Y14.02%
EPS Next 3Y15.1%
5. Dividend
5.1 Amount
With a Yearly Dividend Yield of 4.53%, ALE is a good candidate for dividend investing.
Compared to an average industry Dividend Yield of 3.53, ALE pays a bit more dividend than its industry peers.
Compared to an average S&P500 Dividend Yield of 2.34, ALE pays a better dividend.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 4.53% |
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 its dividend for at least 10 years, so it has a reliable track record of non decreasing dividend.
Dividend Growth(5Y)3.68%
Div Incr Years14
Div Non Decr Years19
5.3 Sustainability
ALE pays out 90.47% 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.
DP90.47%
EPS Next 2Y14.02%
EPS Next 3Y15.1%
64.33
-0.27 (-0.42%)
Chartmill FA Rating
GICS SectorUtilities
GICS IndustryGroupUtilities
GICS IndustryElectric Utilities
Earnings (Last)
Earnings (Next)
Inst Owners74.54%
Inst Owner Change1.73%
Ins Owners0.27%
Ins Owner Change2.74%
Market Cap3.73B
Analysts77.14
Price Target70.67 (9.86%)
Short Float %2.67%
Short Ratio2.73
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 4.53% |
Yearly Dividend2.82
Dividend Growth(5Y)3.68%
DP90.47%
Div Incr Years14
Div Non Decr Years19
Ex-Date
Surprises & Revisions
EPS beat(2)0
Avg EPS beat(2)-22.35%
Min EPS beat(2)-37.05%
Max EPS beat(2)-7.65%
EPS beat(4)0
Avg EPS beat(4)-21.03%
Min EPS beat(4)-37.05%
Max EPS beat(4)-7.65%
EPS beat(8)1
Avg EPS beat(8)-2.12%
EPS beat(12)2
Avg EPS beat(12)-5.43%
EPS beat(16)4
Avg EPS beat(16)-4.14%
Revenue beat(2)0
Avg Revenue beat(2)-14.64%
Min Revenue beat(2)-16.12%
Max Revenue beat(2)-13.16%
Revenue beat(4)1
Avg Revenue beat(4)-9.73%
Min Revenue beat(4)-16.12%
Max Revenue beat(4)3.11%
Revenue beat(8)1
Avg Revenue beat(8)-13.44%
Revenue beat(12)5
Avg Revenue beat(12)-2.88%
Revenue beat(16)9
Avg Revenue beat(16)0.95%
PT rev (1m)0.83%
PT rev (3m)4.71%
EPS NQ rev (1m)1.05%
EPS NQ rev (3m)20%
EPS NY rev (1m)-5.03%
EPS NY rev (3m)-7.36%
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 | 20.29 | ||
| Fwd PE | 15.96 | ||
| P/S | 2.44 | ||
| P/FCF | N/A | ||
| P/OCF | 8.68 | ||
| P/B | 1.3 | ||
| P/tB | 1.38 | ||
| EV/EBITDA | 12.79 |
EPS(TTM)3.17
EY4.93%
EPS(NY)4.03
Fwd EY6.26%
FCF(TTM)-0.92
FCFYN/A
OCF(TTM)7.41
OCFY11.52%
SpS26.4
BVpS49.31
TBVpS46.63
PEG (NY)1.07
PEG (5Y)N/A
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 2.66% | ||
| ROE | 6.42% | ||
| ROCE | 2.35% | ||
| ROIC | 2.15% | ||
| ROICexc | 2.16% | ||
| ROICexgc | 2.22% | ||
| OM | 10.08% | ||
| PM (TTM) | 11.98% | ||
| GM | 92.03% | ||
| FCFM | N/A |
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-Score4
Asset Turnover0.22
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.68 | ||
| Debt/FCF | N/A | ||
| Debt/EBITDA | 4.34 | ||
| Cap/Depr | 166.59% | ||
| Cap/Sales | 31.56% | ||
| Interest Coverage | 1.96 | ||
| Cash Conversion | 96.74% | ||
| Profit Quality | N/A | ||
| Current Ratio | 1.34 | ||
| Quick Ratio | 0.81 | ||
| Altman-Z | 1.08 |
F-Score4
WACC7.25%
ROIC/WACC0.3
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)-17.23%
EPS 3Y-1.36%
EPS 5Y-2.89%
EPS Q2Q%-3.51%
EPS Next Y18.92%
EPS Next 2Y14.02%
EPS Next 3Y15.1%
EPS Next 5Y11.96%
Revenue 1Y (TTM)-0.44%
Revenue growth 3Y2.53%
Revenue growth 5Y4.28%
Sales Q2Q%1.64%
Revenue Next Year-1.51%
Revenue Next 2Y2%
Revenue Next 3Y3.82%
Revenue Next 5Y5.14%
EBIT growth 1Y-0.9%
EBIT growth 3Y1.9%
EBIT growth 5Y-2.29%
EBIT Next Year158.47%
EBIT Next 3Y53.28%
EBIT Next 5Y37.33%
FCF growth 1Y-117.26%
FCF growth 3YN/A
FCF growth 5YN/A
OCF growth 1Y-23.29%
OCF growth 3Y20.16%
OCF growth 5Y12.87%