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Fundamental analysis: ALLETE, Inc. (ALE)

Awarener score: 5.5

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 (Modest) and growth (Poor), and the company's inclination to return cash to the stockholders (Very good).

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: 4.0

  • Business has been shrinking. It's been substantially worse when measured against peer companies.
  • ALLETE, Inc. business trend isn't so stable. The higher the stability, the lower the risk. It looks worse than most rivals.

Margins score: 7.5

  • ALE profit margins -on goods and services sold- are usually sufficient. They stand mediocre against rival companies.
  • Business profit on sales tends to be very good. It's weak 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 slightly worse than similar companies.
  • Profits -before income taxes- are usually good considering total sales, and remain below average when measured against rivals.
  • Total net profit tends to be very good when confronted to sales. Company stands encouraging in relation to comparable firms.

Growth score: 2.7

  • ALLETE, Inc. profit growth -on goods and services sold- has been almost stagnant. It's been in a weak position compared to competitors.
  • In recent years, earnings -on operations- have been shrinking, which has been worse than most comparable firms.
  • Profits growth -available to repay debt and purchase properties- have been almost stagnant, which compares below average when measured against peer enterprises.
  • Growth on earnings -before income taxes and interests on loans taken- have been almost stagnant. It turns to be in a 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 almost null, and weak when measured against peer companies.
  • Earnings per share have been almost stagnant in past years. It's been in a 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: 6.8

  • ALLETE, Inc. usually gets good returns on the resources it controls. It proves weak when measured against peer firms.
  • The company normally gets sufficient proceeds -on the resources directly invested in the business-. They remain in a very weak position compared to similar companies.
  • Profitability -in relation to owned resources- is usually quite good. It ranks weak when measured against competitors.
  • In the past, got good 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 weak when measured against comparable enterprises.

Usage of Funds score: 4.9

  • ALE usually uses almost all genuine funds generated to buy or replace property, plant, or equipment. The need for reinvestments is huge. It stands weak when measured against rival firms.
  • The company is usually largely investing in new property, plant, and equipment, to expand its operating capabilities, which is below average when measured against industry peers.
  • In the past twelve months it paid excellent dividends, considering the current stock price. It came well ranked against competitors.
  • In recent years, has slightly cut back dividend payments. The company has behaved in a weak position 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 barely enlarges the pool of investors, resulting in slightly more mouths feeding on the pie of profits. It remains in good shape 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: 4.6

  • ALLETE, Inc. has no intangible assets (like brands and goodwill) according to accounting books, which is safest. It happens to be top tier 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 in a very weak position compared to similar firms.
  • Roughly a third of resources controlled were provided for with financial debt. Creditors have claims on the company. It remains slightly better than rival firms.
  • Controlled resources take time to be turned into cash and equivalents, which is somewhat risky. It looks weak when measured against rivals.
  • For every dollar of short-term obligations, the company has few cents of cash and short-term receivables. It's a disappointment compared to peer firms.
  • For every dollar of short-term obligations, the company has very few cents of cash and equivalents, which is mediocre against similar enterprises.
  • Usually, sales are on a month credit. It still ranks top tier when measured against peers.
  • Normally has approximately somewhat more than two months of sales worth in inventory. It comes up as a disappointment compared to competitors.
  • On average, it takes higher than three months from the purchase to charging customers. It happens to be somewhat worse than peers.
  • On average pays suppliers before a month since the purchase. It ranks last-in-rank when measured against industry peers.
  • The company pays its suppliers roughly three months before charging its customers, so there's sufficient money invested in working capital. It's in a very weak position compared to similar companies.
  • Net interest expenses consume a significant portion of usual business earnings, but are mostly bearable. It stands slightly better than 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 almost average when measured against 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 very 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 mediocre against peer companies.

Valuation score: 5.9

  • ALLETE, Inc. looks expensive in relation to profits and financial position. It happens to be more than average in relation to 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 impressive in relation to peers.
  • In the past twelve months, the company neither generated nor consumed funds. Whatever funds it could generate, it reinvested in the business, which stands somewhat worse than similar companies.
  • The company usually consumes more funds than can genuinely generate. Business needs are meet by borrowing money or consuming preexistent cash, which can only keep up until a certain limit. Unless the company is driving business growth, genuine profitability may be brought into question. It's still last-in-rank when measured against industry firms.
  • In the past twelve months, the company has slightly rewarded investors, considering both dividends and share on the pie of earnings. It came up excellent in relation to peer ventures.
  • The company is largely indebted. It should focus on loan repayment before rewarding stockholders. It looks slightly worse than similar enterprises.
  • Considering the past twelve months, traditional Price-to-Earnings relation might be more or less reasonable, but hardly cheap. It ranks similar to peer companies.
  • Comparing the current stock price with the past twelve-months revenues gives a roughly two to one relationship. This is an important metric to check its evolution through time, and to compare to industry peers. It looks in a very weak position 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 somewhat better than peer firms.
  • In the past twelve months, the operating business earned some money when compared to the current stock price and financial position. It happens to be encouraging in relation to industry peers.
  • In an alternate metric of bang for the buck, the company has usually shown a very good earnings power ability when measured against the current stock price and financial position. It's still a slight improvement compared to peer companies.

Total score: 5.8


ALE logos

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

Sector, industry: Utilities, Utilities—Diversified

Market Cap: 2.94 billions

Revenues TTM: 1.46 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.

Awarener score: 5.5

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 (Modest) and growth (Poor), and the company's inclination to return cash to the stockholders (Very good).