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Fundamental analysis: ALLETE, Inc. (ALE)

Awarener score: 5.6

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 (Lacking), and the company's inclination to return cash to the stockholders (Average).

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: 5.0

  • Business has been slightly 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 worse than most rivals.

Margins score: 7.5

  • ALE profit margins -on goods and services sold- are usually sufficient. They stand worse than most rival companies.
  • Business profit on sales tends to be very good. It's last-in-rank 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 substantially worse 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: 3.3

  • ALLETE, Inc. profit -on goods and services sold- has been growing at a very low pace. 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 -available to repay debt and purchase properties- have been growing at a very low pace, which compares similar to peer enterprises.
  • Earnings -before income taxes and interests on loans taken- have been growing at a very low tempo. It turns to be a slight improvement compared to similar stocks.
  • In past years, growth on profits -before income taxes- was almost stagnant. It was somewhat worse than rivals.
  • In the previous years, growth on total net profit has been almost null, and encouraging in relation to peer companies.
  • Earnings per share have been almost stagnant in past years. It's been rather normal in relation 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: 6.5

  • ALLETE, Inc. usually gets good returns on the resources it controls. It proves substantially worse 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.
  • Profitability -in relation to owned resources- is usually quite good. It ranks weak 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 substantially worse 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 substantially worse when measured against rival firms.
  • The company is usually largely investing in new property, plant, and equipment, to expand its operating capabilities, which is substantially worse 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 lacking 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 close to average when 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 similar to 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 close to average when compared to similar firms.
  • Roughly a third of resources controlled were provided for with financial debt. Creditors have claims on the company. It remains somewhat better than 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 a disappointment compared to peer firms.
  • For every dollar of short-term obligations, the company has extremely few cents of cash and equivalents, which is slightly better than similar enterprises.
  • Usually, sales are on a month credit. It still ranks encouraging in relation 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 substantially worse 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 slightly worse 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 worse than most peer companies.

Valuation score: 6.0

  • 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 excellent in relation to peers.
  • In the past twelve months, the company generated some slightly better free funds in relation to the stock price, which stands well ranked against 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 substantially worse when measured against industry firms.
  • In the past twelve months, the company hasn't rewarded investors, considering both dividends and share on the pie of earnings. It came up close to average when 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 might be more or less reasonable, but hardly cheap. It ranks great 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 in a 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 top-notch against 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 more than average 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 close to average when compared to peer companies.

Total score: 5.8


ALE logos

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

Sector, industry: Utilities, Utilities—Diversified

Market Cap: 3.45 billions

Revenues TTM: 1.54 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: 5.6

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 (Lacking), and the company's inclination to return cash to the stockholders (Average).