Fundamental analysis: ALLETE, Inc. (ALE)

Awarener score: 5.0

Conclusion

The higher the Awarener score, the more bang you get for the buck. It measures how much genuine funds the company generates for the stock price paid (Average), the business stability (Average) and growth (Poor), and the company's inclination to return cash to the stockholders (Modest).

Note: All scores range from 1 (worst) to 10 (best). Conclusions are updated daily with closing stock prices and new reported quarterly financial statements.

Revenue score: 4.5

Business has been shrinking. It's been last-in-rank when measured against peer companies.
ALLETE, Inc. business trend stability is run-of-the-mill. The higher the stability, the lower the risk. It looks mediocre against rivals.

Margins score: 7.3

ALE profit margins -on goods and services sold- are usually hardly sufficient. They stand mediocre against rival companies.
Business profit on sales tends to be very good. It's substantially worse when measured against competitors.
Profits on sales made -available to repay debt and purchase properties- are usually very good. They remain rather normal in relation to peers.
Earnings -before income taxes and interests on loans taken- tend to be very good in relation to total revenues. They're still mediocre against similar companies.
Profits -before income taxes- are usually good considering total sales, and remain weak when measured against rivals.
Total net profit tends to be very good when confronted to sales. Company stands similar to comparable firms.

Growth score: 2.0

ALLETE, Inc. profit -on goods and services sold- has been shrinking. It's been in a very weak position compared to competitors.
In recent years, earnings -on operations- have been shrinking, which has been worse than most comparable firms.
Profits -available to repay debt and purchase properties- tended to shrink, which compares substantially worse when measured against peer enterprises.
Earnings -before income taxes and interests on loans taken- tended to shrink. It turns to be in a very weak position compared to similar stocks.
In past years, profits -before income taxes- tended to shrink. It was worse than most rivals.
In the previous years, growth on total net profit has been negative, and substantially worse when measured against peer companies.
Earnings per share have been shrinking in the past years. It's been in a very weak position compared to industry peers.

Miscellaneous score: 10.0

ALE managed to get a credit on income taxes in the past years, even though it earned money. It's been top-notch against peers.
The company does not report R&D expenses. It's meaningless to measure in relation to competitors.
We have insufficient data to estimate how effective is research and development effort. It stands unknown against rival companies.

Profitability score: 6.2

ALLETE, Inc. usually gets good returns on the resources it controls. It proves last-in-rank when measured against peer firms.
The company normally gets sufficient proceeds -on the resources directly invested in the business-. They remain a disappointment compared to similar companies.
There's usually some profitability -in relation to owned resources-. It ranks substantially worse when measured against competitors.
In the past, got sufficient returns -on the tangible resources it controls-. This metric is usually related to the industry in which operates and combines profitability versus reinvestment needs. It's last-in-rank when measured against comparable enterprises.

Usage of Funds score: 4.6

ALE usually uses almost all genuine funds generated to buy or replace property, plant, or equipment. The need for reinvestments is huge. It stands last-in-rank when measured against rival firms.
The company is usually largely investing in new property, plant, and equipment, to expand its operating capabilities, which is weak when measured against industry peers.
In the past twelve months it paid very good dividends, considering the current stock price. It came top-notch against competitors.
In recent years, has slightly cut back dividend payments. The company has behaved close to average when compared to similar firms.
The company generates very few genuine funds. Dividend payments are usually on borrowed money, which isn't sustainable in the long run. Unless business prospects improve greatly, future payments could be at risk. Sustainability looks bottom tier against comparable companies.
The company somewhat enlarges a bit the pool of investors, resulting in more mouths feeding on the pie of profits. It remains a disappointment compared to peer enterprises.
Repurchase effectiveness metric is very complex. Run again in analytical mode if you're interested in a technical explanation. It stands in a very weak position compared to rivals.
We do not have sufficient data to comment on buybacks and their sustainability. It still looks dubious against competitors.

Balance Sheet score: 3.9

ALLETE, Inc. intangible assets (like brands and goodwill) represent a very small portion of resources controlled, according to accounting books, which is mostly safe. It happens to be substantially worse when measured against peer companies.
The company has somewhat lower short-term resources than short-term obligations. Unless it's part of the business model, there might some liquidity concerns. It turns to be lacking compared to similar firms.
Roughly a quarter of resources controlled were provided for with financial debt. Creditors have some claims on the company. It remains well ranked against rival firms.
Controlled resources take time to be turned into cash and equivalents, which is somewhat risky. It looks almost average when measured against rivals.
For every dollar of short-term obligations, the company has few cents of cash and short-term receivables. It's in a very weak position compared to peer firms.
For every dollar of short-term obligations, the company has extremely few cents of cash and equivalents, which is slightly worse than similar enterprises.
Usually, sales are on a month credit. It still ranks similar to peers.
Normally has approximately five months of sales worth in inventory. It comes up as a disappointment compared to competitors.
On average, it takes higher than six months from the purchase to charging customers. It happens to be bottom tier against peers.
On average pays suppliers after a month and a half from the purchase. It ranks weak when measured against industry peers.
The company pays its suppliers six months or more before charging its customers, so there's abundant money invested in working capital. It's a disappointment compared to similar companies.
Net interest expenses consume a significant portion of usual business earnings, but are mostly bearable. It stands mediocre against rival firms.
Business earnings have usually been reasonable when measured against loans taken. Cutting back reinvesting in the business, it could take more than five years to repay the obligations with current profitability. It ranks similar to comparable enterprises.
Last twelve months revenues were non-significant in relation to fixed assets. The company must improve income to take advantage of used resources. It looks in a weak position compared to similar firms.
Resource exploitation is low when yearly sales are considered, business volume must be significantly increased. This metric is normally tied to the industry where the firm belongs. It's still bottom tier against peer companies.

Valuation score: 5.5

ALLETE, Inc. looks very expensive in relation to profits and financial position. It happens to be substantially worse when measured against competitors.
Price-to-Tangible-Book-Value is a fairly complex metric. Run again in analytical mode if you're interested in a technical explanation. It remains in good shape compared to peers.
In the past twelve months, the company generated excellent free funds in relation to the stock price, which stands better than most similar companies.
In the past years the company hardly generated enough genuine funds to cover up for its business needs. Business prospects should improve enough to be in a better position to reward investors. It's still weak when measured against industry firms.
In the past twelve months, the company has slightly enlarged the pool of investors by issuing new shares. The pie of earnings will now be split among a little more stockholders. It came up a disappointment compared to peer ventures.
The company is indebted, it should focus on loan repayment. It looks slightly worse than similar enterprises.
Considering the past twelve months, traditional Price-to-Earnings relation is high. Substantial improvement expectations are already in the stock price, which is somewhat risky. It ranks below average when measured against peer companies.
Comparing the current stock price with the past twelve-months revenues gives a three or four to one relationship. This is an important metric to check its evolution through time, and to compare to industry peers. It looks lacking compared to rival firms.
The relation between the stock price and accounting book value might be reasonable. It's important both to check this metric through time and to compare it with rival companies. The company remains better than most peer firms.
In the past twelve months, the operating business earned little money when compared to the current stock price and financial position. It happens to be weak when measured against industry peers.
In an alternate metric of bang for the buck, the company has usually shown a good earnings power ability when measured against the current stock price and financial position. It's still lacking compared to peer companies.

Total score: 5.5

Company at a glance: ALLETE, Inc. (ALE)

Sector, industry: Utilities, Utilities—Diversified

Market Cap: 3.50 billions

Revenues TTM: 1.57 billions

ALLETE, Inc. operates as an energy company. The company operates through Regulated Operations, ALLETE Clean Energy, and Corporate and Other segments. It generates electricity from coal-fired, biomass co-fired / natural gas, hydroelectric, wind, and solar. The company provides regulated utility electric services in northwestern Wisconsin to approximately 15,000 electric customers, 13,000 natural gas customers, and 10,000 water customers, as well as regulated utility electric services in northeastern Minnesota to approximately 145,000 retail customers and 15 non-affiliated municipal customers. It also owns and maintains electric transmission assets in Wisconsin, Michigan, Minnesota, and Illinois. In addition, the company focuses on developing, acquiring, and operating clean and renewable energy projects; and owns and operates approximately 1,000 megawatts of wind energy generation facility. Further, it is involved in the coal mining operations in North Dakota; and real estate investment activities in Florida. The company owns and operates 158 substations with a total capacity of 10,066 megavolt amperes. It serves taconite mining, paper, pulp and secondary wood products, pipeline, and other industries. The company was formerly known as Minnesota Power, Inc. and changed its name to ALLETE, Inc. in May 2001. ALLETE, Inc. was incorporated in 1906 and is headquartered in Duluth, Minnesota.