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ALLETE

NYSE:ALE
Snowflake Description

Established dividend payer with proven track record.

The Snowflake is generated from 30 checks in 5 different areas, read more below.
ALE
NYSE
$4B
Market Cap
  1. Home
  2. US
  3. Utilities
Company description

ALLETE, Inc. operates as an energy company. The last earnings update was 22 days ago. More info.


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ALE Share Price and Events
7 Day Returns
0.5%
NYSE:ALE
2.3%
US Electric Utilities
-2.1%
US Market
1 Year Returns
8.5%
NYSE:ALE
17.1%
US Electric Utilities
1.3%
US Market
ALE Shareholder Return
  7 Day 30 Day 90 Day 1 Year 3 Year 5 Year
ALLETE (ALE) 0.5% 3% 0.2% 8.5% 43.5% 66.1%
US Electric Utilities 2.3% 3.2% 4.6% 17.1% 21.4% 40.6%
US Market -2.1% -4.2% 0% 1.3% 33.5% 38%
1 Year Return vs Industry and Market
  • ALE underperformed the Electric Utilities industry which returned 17.1% over the past year.
  • ALE outperformed the Market in United States of America which returned 1.3% over the past year.
Price Volatility
ALE
Industry
5yr Volatility vs Market

Value

 Is ALLETE undervalued based on future cash flows and its price relative to the stock market?

Value is all about what a company is worth versus what price it is available for. If you went into a grocery store and all the bananas were on sale at half price, they could be considered undervalued.
INTRINSIC VALUE BASED ON FUTURE CASH FLOWS
Here we compare the current share price of ALLETE to its discounted cash flow analysis.value.

The discounted cash flow value is simply looking at what the company is worth today, based on estimates of how much money it is expected to make in the future.
Raw Data

Below are the data sources, inputs and calculation used to determine the intrinsic value for ALLETE.

NYSE:ALE Discounted Cash Flow Data Sources
Data Point Source Value
Valuation Model 2 Stage Free Cash Flow to Equity
Levered Free Cash Flow Average of 3 Analyst Estimates (S&P Global) See below
Discount Rate (Cost of Equity) See below 7.5%
Perpetual Growth Rate 10-Year US Government Bond Rate 2.7%

An important part of a discounted cash flow is the discount rate, below we explain how it has been calculated.

Calculation of Discount Rate/ Cost of Equity for NYSE:ALE
Data Point Calculation/ Source Result
Risk-Free Rate 10-Year US Govt Bond Rate 2.7%
Equity Risk Premium S&P Global 6%
Electric Utilities Unlevered Beta Simply Wall St/ S&P Global 0.24
Re-levered Beta = Unlevered beta (1 + (1- tax rate) (Debt/Equity))
= 0.236 (1 + (1- 21%) (36.94%))
0.534
Levered Beta Levered Beta limited to 0.8 to 2.0
(practical range for a stable firm)
0.8
Discount Rate/ Cost of Equity = Cost of Equity = Risk Free Rate + (Levered Beta * Equity Risk Premium)
= 2.73% + (0.8 * 5.96%)
7.5%

Discounted Cash Flow Calculation for NYSE:ALE using 2 Stage Free Cash Flow to Equity Model

The calculations below outline how an intrinsic value for ALLETE is arrived at by discounting future cash flows to their present value using the 2 stage method. We try to start with analysts estimates of free cash flow, however if these are not available we use the most recent financial results. In the 1st stage we continue to grow the free cash flow over a 10 year period, with the growth rate trending towards the perpetual growth rate used in the 2nd stage. The 2nd stage assumes the company grows at a stable rate into perpetuity.

NYSE:ALE DCF 1st Stage: Next 10 year cash flow forecast
Levered FCF (USD, Millions) Source Present Value
Discounted (@ 7.5%)
2019 -18.00 Analyst x1 -16.74
2020 132.00 Analyst x1 114.23
2021 156.00 Analyst x1 125.58
2022 175.49 Est @ 12.49% 131.42
2023 192.27 Est @ 9.56% 133.94
2024 206.72 Est @ 7.51% 133.96
2025 219.29 Est @ 6.08% 132.19
2026 230.42 Est @ 5.07% 129.21
2027 240.49 Est @ 4.37% 125.45
2028 249.81 Est @ 3.88% 121.23
Present value of next 10 years cash flows $1,130.48
NYSE:ALE DCF 2nd Stage: Terminal Value
Calculation Result
Terminal Value = FCF2028 × (1 + g) ÷ (Discount Rate – g)
= $249.81 × (1 + 2.73%) ÷ (7.5% – 2.73%)
$5,382.43
Present Value of Terminal Value = Terminal Value ÷ (1 + r)10
= $5,382.43 ÷ (1 + 7.5%)10
$2,612.01
NYSE:ALE Total Equity Value
Calculation Result
Total Equity Value = Present value of next 10 years cash flows + Terminal Value
= $1,130.48 + $2,612.01
$3,742.49
Equity Value per Share
(USD)
= Total value / Shares Outstanding
= $3,742.49 / 51.62
$72.49
NYSE:ALE Discount to Share Price
Calculation Result
Value per share (USD) From above. $72.49
Current discount Discount to share price of $82.49
= -1 x ($82.49 - $72.49) / $72.49
-13.8%

Learn more about our DCF calculations in Simply Wall St’s analysis model .

  • The current share price of ALLETE is above its future cash flow value.
Often investors are willing to pay a premium for a company that has a high dividend or the potential for future growth.
PRICE RELATIVE TO MARKET
We can also value a company based on what the stock market is willing to pay for it. This is similar to the price of fruit (e.g. Mangoes or Avocados) increasing when they are out of season, or how much your home is worth.

The amount the stock market is willing to pay for ALLETE's earnings, growth and assets is considered below, and whether this is a fair price.
Price based on past earnings
Are ALLETE's earnings available for a low price, and how does this compare to other companies in the same industry?
Raw Data
NYSE:ALE PE (Price to Earnings) Ratio Data Sources
Data Point Source Value
Earnings Per Share * Company Filings (2019-03-31) in USD $3.77
NYSE:ALE Share Price ** NYSE (2019-05-24) in USD $82.49
United States of America Electric Utilities Industry PE Ratio Median Figure of 26 Publicly-Listed Electric Utilities Companies 22.08x
United States of America Market PE Ratio Median Figure of 3,082 Publicly-Listed Companies 17.36x

* Trailing twelve months (TTM) annual GAAP earnings per share excluding extraordinary items.

** Primary Listing of ALLETE.

NYSE:ALE PE (Price to Earnings) Ratio Calculation
Calculation Outcome
PE Ratio

= NYSE:ALE Share Price ÷ EPS (both in USD)

= 82.49 ÷ 3.77

21.9x

Learn more about our ratios and growth rates in Simply Wall St’s analysis model >

  • ALLETE is good value based on earnings compared to the US Electric Utilities industry average.
  • ALLETE is overvalued based on earnings compared to the United States of America market.
Price based on expected Growth
Does ALLETE's expected growth come at a high price?
Raw Data
NYSE:ALE PEG (Price to Earnings to Growth) Ratio Data Sources
Data Point Source Value
PE Ratio See PE Ratio Section 21.9x
Net Income Annual Growth Rate See Future Growth Section.
Line of Best Fit* through Consensus Estimate Earnings of 3 Analysts
3%per year
United States of America Electric Utilities Industry PEG Ratio Median Figure of 23 Publicly-Listed Electric Utilities Companies 3.11x
United States of America Market PEG Ratio Median Figure of 2,120 Publicly-Listed Companies 1.5x

*Line of best fit is calculated by linear regression .

NYSE:ALE PEG (Price to Earnings to Growth) Ratio Calculation
Calculation Outcome
PEG Ratio

= PE Ratio ÷ Net Income Annual Growth Rate

= 21.9x ÷ 3%

7.42x

Learn more about our ratios and growth rates in Simply Wall St’s analysis model >

  • ALLETE is poor value based on expected growth next year.
Price based on value of assets
What value do investors place on ALLETE's assets?
Raw Data
NYSE:ALE PB (Price to Book) Ratio Data Sources
Data Point Source Value
Book Value per Share Company Filings (2019-03-31) in USD $42.59
NYSE:ALE Share Price * NYSE (2019-05-24) in USD $82.49
United States of America Electric Utilities Industry PB Ratio Median Figure of 29 Publicly-Listed Electric Utilities Companies 2.1x
United States of America Market PB Ratio Median Figure of 5,207 Publicly-Listed Companies 1.8x
NYSE:ALE PB (Price to Book) Ratio Calculation
Calculation Outcome
PB Ratio

= NYSE:ALE Share Price ÷ Book Value per Share (both in USD)

= 82.49 ÷ 42.59

1.94x

* Primary Listing of ALLETE.

Learn more about our ratios and growth rates in Simply Wall St’s analysis model >

  • ALLETE is good value based on assets compared to the US Electric Utilities industry average.
X
Value checks
We assess ALLETE's value by looking at:
  1. Is the discounted cash flow value less than 20%, or 40% of the share price? (2 checks) ( Click here or on bar chart for details of DCF calculation. )
  2. Is the PE ratio less than the market average, and/ or less than the Electric Utilities industry average (and greater than 0)? (2 checks)
  3. Is the PEG ratio within a reasonable range (0 to 1)? (1 check)
  4. Is the PB ratio less than the Electric Utilities industry average (and greater than 0)? (1 check)
  5. ALLETE has a total score of 2/6, see the detailed checks below.

    Note: We use GAAP Earnings per Share in all our calculations including PE and PEG Ratio.

    Full details on the Value part of the Simply Wall St company analysis model.

Future Performance

 How is ALLETE expected to perform in the next 1 to 3 years based on estimates from 3 analysts?

The future performance of a company is measured in the same way as past performance, by looking at estimated growth and how much profit it is expected to make.

Future estimates come from professional analysts. Just like forecasting the weather, they don’t always get it right!
Annual Growth Rate
3%
Expected annual growth in earnings.
Earnings growth vs Low Risk Savings
Is ALLETE expected to grow at an attractive rate?
  • ALLETE's earnings growth is expected to exceed the low risk savings rate of 2.7%.
Growth vs Market Checks
  • ALLETE's earnings growth is positive but not above the United States of America market average.
  • ALLETE's revenue growth is positive but not above the United States of America market average.
Annual Growth Rates Comparison
Raw Data
NYSE:ALE Future Growth Rates Data Sources
Data Point Source Value (per year)
NYSE:ALE Future Earnings Growth Rate Line of Best Fit* through Consensus Estimate Earnings of 3 Analysts 3%
NYSE:ALE Future Revenue Growth Rate Line of Best Fit* through Consensus Estimate Revenue of 3 Analysts 1.5%
United States of America Electric Utilities Industry Earnings Growth Rate Market Cap Weighted Average 8.3%
United States of America Electric Utilities Industry Revenue Growth Rate Market Cap Weighted Average 2.3%
United States of America Market Earnings Growth Rate Market Cap Weighted Average 13.7%
United States of America Market Revenue Growth Rate Market Cap Weighted Average 7.3%

*Line of best fit is calculated by linear regression .

Industry and Market average data is calculated daily.

Learn more about our growth rate calculations in Simply Wall St’s analysis model.

Analysts growth expectations
Raw Data
NYSE:ALE Analysts Growth Expectations Data Sources
Data Point Source Value
Past Financials Company Filings (1 month ago) See Below
Future Estimates Average of up to 3 Analyst Estimates (S&P Global) See Below
All numbers in USD Millions and using Trailing twelve months (TTM) annual period rather than quarterly.
NYSE:ALE Future Estimates Data
Date (Data in USD Millions) Revenue Cash Flow Net Income * Avg. No. Analysts
2022-12-31 481
2021-12-31 1,461 420 202 2
2020-12-31 1,405 392 191 3
2019-12-31 1,314 338 176 2
NYSE:ALE Past Financials Data
Date (Data in USD Millions) Revenue Cash Flow Net Income *
2019-03-31 1,498 391 194
2018-12-31 1,499 433 174
2018-09-30 1,388 394 154
2018-06-30 1,403 413 169
2018-03-31 1,412 426 174
2017-12-31 1,419 403 172
2017-09-30 1,423 401 175
2017-06-30 1,410 370 171
2017-03-31 1,372 338 158
2016-12-31 1,340 335 155
2016-09-30 1,379 323 129
2016-06-30 1,492 304 149

*GAAP earnings excluding extraordinary items.

Super high growth metrics
High Growth Checks
  • ALLETE's earnings are expected to grow by 3% yearly, however this is not considered high growth (20% yearly).
  • ALLETE's revenue is expected to grow by 1.5% yearly, however this is not considered high growth (20% yearly).
Past and Future Earnings per Share
The accuracy of the analysts who estimate the future performance data can be gauged below. We look back 3 years and see if they were any good at predicting what actually occurred. We also show the highest and lowest estimates looking forward to see if there is a wide range.
Raw Data
NYSE:ALE Past and Future Earnings per Share
Data Point Source Value
Past Financials Company Filings (1 month ago) See Below
Future Estimates Average of up to 3 Analyst Estimates (S&P Global) See Below

All data from ALLETE Company Filings, last reported 1 month ago, and in Trailing twelve months (TTM) annual period rather than quarterly.

NYSE:ALE Future Estimates Data
Date (Data in USD Millions) EPS * EPS High Estimate EPS Low Estimate Avg. No. Analysts
2022-12-31 4.30 4.30 4.30 1.00
2021-12-31 4.07 4.20 3.92 3.00
2020-12-31 3.80 3.91 3.67 3.00
2019-12-31 3.56 3.65 3.42 3.00
NYSE:ALE Past Financials Data
Date (Data in USD Millions) EPS *
2019-03-31 3.77
2018-12-31 3.39
2018-09-30 3.01
2018-06-30 3.30
2018-03-31 3.41
2017-12-31 3.39
2017-09-30 3.48
2017-06-30 3.41
2017-03-31 3.20
2016-12-31 3.15
2016-09-30 2.62
2016-06-30 3.05

*GAAP earnings excluding extraordinary items.

Performance in 3 years
In the same way as past performance we look at the future estimated return (profit) compared to the available funds. We do this looking forward 3 years.
  • ALLETE is not expected to efficiently use shareholders’ funds in the future (Return on Equity less than 20%).
X
Future performance checks
We assess ALLETE's future performance by looking at:
  1. Is the annual earnings growth rate expected to beat the low risk savings rate, plus a premium to keep pace with inflation?
  2. Is the annual earnings growth rate expected to beat the average growth rate in earnings of the United States of America market? (1 check)
  3. Is the annual revenue growth rate expected to beat the average growth rate in revenue of the United States of America market? (1 check)
  4. Is the annual earnings growth rate expected to be above 20%? (1 check)
  5. Is the annual revenue growth rate expected to be above 20%? (1 check)
  6. Is the Return on Equity in 3 years expected to be over 20%? (1 check)
Some of the above checks will fail if the company is expected to be loss making in the relevant year.
ALLETE has a total score of 1/6, see the detailed checks below.

Note 1: We use GAAP Net Income Excluding Exceptional Items for our Earnings in all our calculations.

Full details on the Future part of the Simply Wall St company analysis model.

Past Performance

  How has ALLETE performed over the past 5 years?

The past performance of a company can be measured by how much growth it has experienced and how much profit it makes relative to the funds and assets it has available.
Past earnings growth
Below we compare ALLETE's growth in the last year to its industry (Electric Utilities).
Past Earnings growth analysis
We also check if the company has grown in the past 5 years, and whether it has maintained that growth in the year.
  • ALLETE's year on year earnings growth rate has been positive over the past 5 years.
  • ALLETE's 1-year earnings growth exceeds its 5-year average (11.1% vs 9.1%)
  • ALLETE's earnings growth has exceeded the US Electric Utilities industry average in the past year (11.1% vs 9.7%).
Earnings and Revenue History
ALLETE's revenue and profit over the past 5 years is shown below, any years where they have experienced a loss will show up in red.
Raw Data

All data from ALLETE Company Filings, last reported 1 month ago, and in Trailing twelve months (TTM) annual period rather than quarterly.

NYSE:ALE Past Revenue, Cash Flow and Net Income Data
Date (Data in USD Millions) Revenue Net Income * G+A Expenses R&D Expenses
2019-03-31 1,497.60 193.60 -9.10
2018-12-31 1,498.60 174.10 -8.60
2018-09-30 1,388.20 154.40 -2.10
2018-06-30 1,402.70 168.60
2018-03-31 1,411.90 174.20 -5.10
2017-12-31 1,419.30 172.20 -4.50
2017-09-30 1,422.90 175.10 -3.40
2017-06-30 1,410.00 170.50
2017-03-31 1,371.50 158.40 -1.10
2016-12-31 1,339.70 155.30 -7.40
2016-09-30 1,378.80 129.30
2016-06-30 1,491.70 149.40
2016-03-31 1,500.20 147.10
2015-12-31 1,486.40 141.10
2015-09-30 1,396.50 155.70
2015-06-30 1,222.90 136.90
2015-03-31 1,160.30 131.20
2014-12-31 1,136.80 124.80
2014-09-30 1,114.10 124.90
2014-06-30 1,076.20 108.50
2014-03-31 1,051.10 105.70
2013-12-31 1,018.40 104.70
2013-09-30 1,006.40 100.60
2013-06-30 1,004.20 104.80
2013-03-31 985.00 105.20
2012-12-31 961.20 97.10
2012-09-30 944.40 87.30
2012-06-30 922.50 78.40

*GAAP earnings excluding extraordinary items.

Performance last year
We want to ensure a company is making the most of what it has available. This is done by comparing the return (profit) to a company's available funds, assets and capital.
  • ALLETE has not efficiently used shareholders’ funds last year (Return on Equity less than 20%).
  • ALLETE used its assets more efficiently than the US Electric Utilities industry average last year based on Return on Assets.
  • ALLETE's use of capital deteriorated last year versus 3 years ago (Return on Capital Employed).
X
Past performance checks
We assess ALLETE's performance over the past 5 years by checking for:
  1. Has earnings increased in past 5 years? (1 check)
  2. Has the earnings growth in the last year exceeded that of the Electric Utilities industry? (1 check)
  3. Is the recent earnings growth over the last year higher than the average annual growth over the past 5 years? (1 check)
  4. Is the Return on Equity (ROE) higher than 20%? (1 check)
  5. Is the Return on Assets (ROA) above industry average? (1 check)
  6. Has the Return on Capital Employed (ROCE) increased from 3 years ago? (1 check)
The above checks will fail if the company has reported a loss in the most recent earnings report. Some checks require at least 3 or 5 years worth of data.
ALLETE has a total score of 4/6, see the detailed checks below.

Note: We use GAAP Net Income excluding extraordinary items in all our calculations.

Full details on the Past part of the Simply Wall St company analysis model.

Health

 How is ALLETE's financial health and their level of debt?

A company's financial position is much like your own financial position, it includes everything you own (assets) and owe (liabilities).

The boxes below represent the relative size of what makes up ALLETE's finances.

The net worth of a company is the difference between its assets and liabilities.
Net Worth
  • ALLETE is able to meet its short term (1 year) commitments with its holdings of cash and other short term assets.
  • ALLETE's long term commitments exceed its cash and other short term assets.
Balance sheet
This treemap shows a more detailed breakdown of ALLETE's finances. If any of them are yellow this indicates they may be out of proportion and red means they relate to one of the checks below.
Assets
Liabilities and shares
The 'shares' portion represents any funds contributed by the owners (shareholders) and any profits.
  • High level of physical assets or inventory.
  • Debt is not covered by short term assets, assets are 0.4x debt.
Historical Debt
Nearly all companies have debt. Debt in itself isn’t bad, however if the debt is too high, or the company can’t afford to pay the interest on its debts this may have impacts in the future.

The graphic below shows equity (available funds) and debt, we ideally want to see the red area (debt) decreasing.

If there is any debt we look at the companies capability to repay it, and whether the level has increased over the past 5 years.
Raw Data

All data from ALLETE Company Filings, last reported 1 month ago.

NYSE:ALE Past Debt and Equity Data
Date (Data in USD Millions) Total Equity Total Debt Cash & Short Term Investments
2019-03-31 2,198.70 1,573.30 353.30
2018-12-31 2,155.80 1,486.00 69.10
2018-09-30 2,116.10 1,518.30 128.00
2018-06-30 2,108.20 1,518.90 121.90
2018-03-31 2,097.30 1,502.70 98.50
2017-12-31 2,068.20 1,503.30 98.90
2017-09-30 2,042.70 1,508.70 104.40
2017-06-30 2,017.00 1,519.10 84.20
2017-03-31 2,001.50 1,534.10 81.80
2016-12-31 1,893.00 1,558.10 27.50
2016-09-30 1,873.00 1,545.50 107.20
2016-06-30 1,852.10 1,564.30 91.90
2016-03-31 1,852.50 1,566.80 97.00
2015-12-31 1,822.40 1,594.00 97.00
2015-09-30 1,823.40 1,598.10 103.00
2015-06-30 1,778.40 1,390.40 60.60
2015-03-31 1,770.90 1,376.40 72.10
2014-12-31 1,611.20 1,377.20 145.80
2014-09-30 1,530.70 1,377.20 150.50
2014-06-30 1,417.50 1,327.60 83.60
2014-03-31 1,407.40 1,213.60 44.60
2013-12-31 1,342.90 1,110.20 97.30
2013-09-30 1,287.50 1,103.10 164.50
2013-06-30 1,249.00 1,102.60 145.00
2013-03-31 1,240.50 1,016.30 77.30
2012-12-31 1,201.00 1,018.10 80.80
2012-09-30 1,157.50 1,015.20 104.30
2012-06-30 1,119.70 875.80 8.60
  • ALLETE's level of debt (71.6%) compared to net worth is high (greater than 40%).
  • The level of debt compared to net worth has been reduced over the past 5 years (86.3% vs 71.6% today).
  • Debt is well covered by operating cash flow (24.8%, greater than 20% of total debt).
  • Interest payments on debt are well covered by earnings (EBIT is 3.1x coverage).
X
Financial health checks
We assess ALLETE's financial health by checking for:
  1. Are short term assets greater than short term liabilities? (1 check)
  2. Are short term assets greater than long term liabilities? (1 check)
  3. Has the debt to equity ratio increased in the past 5 years? (1 check)
  4. Is the debt to equity ratio over 40%? (1 check)
  5. Is the debt covered by operating cash flow? (1 check)
  6. Are earnings greater than 5x the interest on debt (if company pays interest at all)? (1 check)
  7. ALLETE has a total score of 4/6, see the detailed checks below.
For companies that are loss making and have been so on average in the past we replace the last 2 checks with:
  1. Does cash and short term investments cover stable operating expenses (recurring G&A and R&D) for more than 3 years? (1 check)
  2. Does cash and short term investments cover growing operating expenses (recurring G&A and R&D) for more than 3 years? (1 check)


Full details on the Health part of the Simply Wall St company analysis model.

Dividends

 What is ALLETE's current dividend yield, its reliability and sustainability?

Dividends are regular cash payments to you from the company, similar to a bank paying you interest on a savings account.
Annual Dividend Income
Dividend payments
2.85%
Current annual income from ALLETE dividends. Estimated to be 3.02% next year.
If you bought $2,000 of ALLETE shares you are expected to receive $57 in your first year as a dividend.
Dividend Amount
Here we look how much dividend is being paid, if any. Is it above what you can get in a savings account? It is up there with the best dividend paying companies?
  • ALLETE's pays a higher dividend yield than the bottom 25% of dividend payers in United States of America (1.47%).
  • ALLETE's dividend is below the markets top 25% of dividend payers in United States of America (3.76%).
Annualized Historical and Future Dividends
It is important to see if the dividend for a company is stable, and not wildly increasing/decreasing each year. This graph shows you the historical rate to count toward your assessment of the stock.

We also check to see if the dividend has increased in the past 10 years.
Raw Data
NYSE:ALE Annualized Past and Future Dividends
Data Point Source Value
Past Annualized Dividend Yield S&P Global Market Data See Below
Past Dividends per Share Company Filings/ Annualized Dividend Payments See Below
Future Dividends per Share Estimates Average of up to 3 Analyst Estimates (S&P Global) See Below
United States of America Electric Utilities Industry Average Dividend Yield Market Cap Weighted Average of 27 Stocks 3.4%
United States of America Market Average Dividend Yield Market Cap Weighted Average of 2008 Stocks 2.5%
United States of America Minimum Threshold Dividend Yield 10th Percentile 0.8%
United States of America Bottom 25% Dividend Yield 25th Percentile 1.5%
United States of America Top 25% Dividend Yield 75th Percentile 3.8%

Industry and Market average data is calculated daily.

Note all dividend per share amounts are annualized and not quarterly or other period.

NYSE:ALE Future Dividends Estimate Data
Date (Data in $) Dividend per Share (annual) Avg. No. Analysts
2022-12-31
2021-12-31 2.59 2.00
2020-12-31 2.47 2.00
2019-12-31 2.35 1.00
NYSE:ALE Past Annualized Dividends Data
Date (Data in $) Dividend per share (annual) Avg. Yield (%)
2019-04-24 2.350 2.883
2019-02-01 2.350 2.907
2018-10-25 2.240 2.914
2018-07-27 2.240 2.940
2018-04-25 2.240 2.937
2018-01-24 2.240 3.175
2017-10-25 2.140 2.806
2017-07-27 2.140 2.786
2017-04-26 2.140 2.992
2017-01-25 2.140 3.192
2016-10-28 2.080 3.331
2016-07-28 2.080 3.462
2016-04-21 2.080 3.483
2016-01-22 2.080 3.823
2015-11-02 2.020 4.006
2015-07-31 2.020 4.068
2015-04-30 2.020 4.175
2015-01-23 2.020 3.775
2014-10-30 1.960 3.671
2014-07-31 1.960 4.112
2014-05-01 1.960 3.969
2014-01-30 1.960 3.858
2013-10-28 1.900 3.837
2013-07-29 1.900 3.880
2013-05-01 1.900 3.789
2013-01-23 1.900 3.963
2012-10-31 1.840 4.517
2012-07-26 1.840 4.434
2012-01-26 1.840 4.496
2011-10-31 1.780 4.459
2011-07-20 1.780 4.653
2011-04-20 1.780 4.445
2011-01-20 1.780 4.687
2010-10-20 1.760 4.824
2010-07-21 1.760 4.844
2010-04-21 1.760 4.995
2010-01-21 1.760 5.354
2009-10-22 1.760 5.278
2009-07-22 1.760 5.280

Learn more about our ratios and growth rates in Simply Wall St’s analysis model >

  • Dividends per share have been stable in the past 10 years.
  • Dividends per share have increased over the past 10 years.
Current Payout to shareholders
What portion of ALLETE's earnings are paid to the shareholders as a dividend.
  • Dividends paid are covered by earnings (1.7x coverage).
Future Payout to shareholders
  • Dividends after 3 years are expected to be covered by earnings (1.7x coverage).
X
Income/ dividend checks
We assess ALLETE's dividend by checking for:
  1. Firstly is the company paying a notable dividend (greater than 0.8%) - if not then the rest of the checks are ignored.
  2. Is current dividend yield above the bottom 25% of dividend payers? (1 check)
  3. Is current dividend yield above the top 25% of dividend payers? (1 check)
  4. Have they paid a dividend for 10 years, and during this period has the dividend been volatile (drop of more than 25%)? (1 check)
  5. If they have paid a dividend for 10 years has it increased in this time? (1 check)
  6. How sustainable is the dividend, can ALLETE afford to pay it from its earnings today and in 3 years (Payout ratio less than 90%)? (2 checks)
  7. ALLETE has a total score of 5/6, see the detailed checks below.


Full details on the Dividends part of the Simply Wall St company analysis model.

Management

 What is the CEO of ALLETE's salary, the management and board of directors tenure and is there insider trading?

Management is one of the most important areas of a company. We look at unreasonable CEO compensation, how long the team and board of directors have been around for and insider trading.
CEO
Al Hodnik
COMPENSATION $3,493,458
AGE 58
TENURE AS CEO 9 years
CEO Bio

Mr. Alan R. Hodnik, also known as Al, has been the Chairman of the Board of ALLETE, Inc. since May 10, 2011, serves as the Chief Executive Officer since May 1, 2010 and served as its President from May 1, 2009 till January 31, 2019. Mr. Hodnik has utility operations, strategic planning, leadership and broader organizational development experience, as well as a deep understanding of the region served by ALLETE, Inc. He serves as Vice Chairman of the Board at Superior Water, Light and Power Company. He joined ALLETE in 1982 and served in a wide variety of positions of increasing responsibility, including Chief Operating Officer of Minnesota Power at ALLETE, Inc. since May 8, 2007 with responsibilities for transmission, distribution, generation and engineering functions as well as Superior Water Light & Power and BNI energy, inc. Mr. Hodnik served as Senior Vice President of Minnesota Power Operations, Vice President of Generation Operations and Leader of Organizational Development Team at ALLETE. He maintained strong working relationships with business, organized labor, political and education leaders in northeastern Minnesota and also served on various state and regional task forces throughout his career. He has been a Director of Essentia Health since July 27, 2016. He has been a Director at ALLETE, Inc. since May 12, 2009. He has been an Independent Director of Polymet Mining Corp. since March 09, 2011. He also serves on the Boards of Directors of SMDC Health System. He is a Member of the board of Essentia Health - East Region and of the Area Partnership for Economic Expansion (APEX). He was a Mayor of the City of Aurora from 1987 to 1998. Mr. Hodnik is a graduate of the University of Minnesota.

CEO Compensation
  • Al's compensation has been consistent with company performance over the past year, both up more than 20%.
  • Al's remuneration is lower than average for companies of similar size in United States of America.
Management Team Tenure

Average tenure and age of the ALLETE management team in years:

2.4
Average Tenure
56
Average Age
  • The tenure for the ALLETE management team is about average.
Management Team

Al Hodnik

TITLE
COMPENSATION
$3M
AGE
58
TENURE
9 yrs

Bethany Owen

TITLE
President & Director
COMPENSATION
$852K
AGE
52
TENURE
0.3 yrs

Bob Adams

TITLE
Senior VP & CFO
COMPENSATION
$1M
AGE
55
TENURE
2.2 yrs

Brad Oachs

TITLE
Senior VP & President of Regulated Operations
COMPENSATION
$1M
AGE
60
TENURE
2.5 yrs

Pat Mullen

TITLE
Senior Vice President of External Affairs
COMPENSATION
$648K
AGE
57
TENURE
2.1 yrs

Steve Morris

TITLE
VP, Controller & Chief Accounting Officer
AGE
56
TENURE
2.4 yrs

Vince Meyer

TITLE
Vice President of Investor Relations

Margaret Thickens

TITLE
Vice President
AGE
51
TENURE
0.3 yrs

Nicole Johnson

TITLE
Vice President of Human Resources
TENURE
3.3 yrs

Wade Boeshans

TITLE
President & GM of BNI Energy
TENURE
6.3 yrs
Board of Directors Tenure

Average tenure and age of the ALLETE board of directors in years:

8
Average Tenure
61.5
Average Age
  • The tenure for the ALLETE board of directors is about average.
Board of Directors

Bethany Owen

TITLE
President & Director
COMPENSATION
$852K
AGE
52

Jim Hoolihan

TITLE
Director
COMPENSATION
$153K
AGE
65
TENURE
13 yrs

Al Hodnik

TITLE
COMPENSATION
$3M
AGE
58
TENURE
8 yrs

Kitty Dindo

TITLE
Director
COMPENSATION
$158K
AGE
69
TENURE
9.8 yrs

Heidi Jimmerson

TITLE
Lead Director
COMPENSATION
$164K
AGE
61
TENURE
5 yrs

Madeleine Ludlow

TITLE
Director
COMPENSATION
$157K
AGE
63
TENURE
14.6 yrs

Douglas Neve

TITLE
Director
COMPENSATION
$156K
AGE
62
TENURE
11.8 yrs

George Goldfarb

TITLE
Director
COMPENSATION
$148K
AGE
59
TENURE
6.6 yrs

Bob Powers

TITLE
Director
COMPENSATION
$150K
AGE
63
TENURE
1.8 yrs

Susan Nestegard

TITLE
Director
COMPENSATION
$179K
AGE
58
TENURE
1.3 yrs
Who owns this company?
Recent Insider Trading
  • ALLETE insiders have only sold shares in the past 3 months.
Recent Insider Transactions
Announced Type Name Entity Role Start End Shares Max Price ($) Value ($)
22. May 19 Sell Kathryn Dindo Individual 21. May 19 21. May 19 -735 $82.03 $-60,292
20. May 19 Sell Robert Adams Individual 17. May 19 17. May 19 -2,885 $82.45 $-237,868
08. May 19 Sell Madeleine Ludlow Individual 07. May 19 07. May 19 -2,000 $82.53 $-165,025
X
Management checks
We assess ALLETE's management by checking for:
  1. Is the CEO's compensation unreasonable compared to market cap? (1 check)
  2. Has the CEO's compensation increased more than 20% whilst the EPS is down more then 20%? (1 check)
  3. Is the average tenure of the management team less than 2 years? (1 check)
  4. Is the average tenure of the board of directors team less than 3 years? (1 check)
  5. ALLETE has a total score of 0/6, this is not included on the snowflake, see the detailed checks below.


Note: We use the top 6 management executives and board members in our calculations.

Note 2: Insider trading include any internal stakeholders and these transactions .

Full details on the Management part of the Simply Wall St company analysis model.

News

Simply Wall St News

Calculating The Fair Value Of ALLETE, Inc. (NYSE:ALE)

Today, we will estimate the stock's intrinsic value by taking the expected future cash flows and discounting them to today's value. … Generally we assume that a dollar today is more valuable than a dollar in the future, so we discount the value of these future cash flows to their estimated value in today's dollars: 10-year free cash flow (FCF) forecast 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 Levered FCF ($, Millions) $-18.00 $132.00 $156.00 $175.49 $192.27 $206.72 $219.29 $230.42 $240.49 $249.81 Growth Rate Estimate Source Analyst x1 Analyst x1 Analyst x1 Est @ 12.49% Est @ 9.56% Est @ 7.51% Est @ 6.08% Est @ 5.07% Est @ 4.37% Est @ 3.88% Present Value ($, Millions) Discounted @ 7.5% $-16.74 $114.23 $125.58 $131.42 $133.94 $133.96 $132.19 $129.21 $125.45 $121.23 Present Value of 10-year Cash Flow (PVCF)= $1.13b "Est" = FCF growth rate estimated by Simply Wall St We now need to calculate the Terminal Value, which accounts for all the future cash flows after this ten year period. … NYSE:ALE Intrinsic value, May 18th 2019 The assumptions We would point out that the most important inputs to a discounted cash flow are the discount rate and of course the actual cash flows.

Simply Wall St -

How Did ALLETE, Inc.'s (NYSE:ALE) 8.8% ROE Fare Against The Industry?

The formula for return on equity is: Return on Equity = Net Profit ÷ Shareholders' Equity Or for ALLETE: 8.8% = US$194m ÷ US$2.2b (Based on the trailing twelve months to March 2019.) It's easy to understand the 'net profit' part of that equation, but 'shareholders' equity' requires further explanation. … Combining ALLETE's Debt And Its 8.8% Return On Equity Although ALLETE does use debt, its debt to equity ratio of 0.72 is still low. … Judicious use of debt to improve returns can certainly be a good thing, although it does elevate risk slightly and reduce future optionality.

Simply Wall St -

ALLETE, Inc. (NYSE:ALE): What Does The Future Look Like?

Help shape the future of investing tools and you could win a $250 gift card! … After ALLETE, Inc.'s (NYSE:ALE) earnings announcement in December 2018, … the higher past 5-year average growth rate of 9.3%.

Simply Wall St -

Why ALLETE, Inc. (NYSE:ALE) Is A Star In A Falling Market

The risk of investing in the stock market is a systematic crash. … This is when all the stock prices start falling around the same time. … But this risk is also an opportunity for those that understand the fickle nature of the market.

Simply Wall St -

Is ALLETE, Inc. (NYSE:ALE) A Smart Pick For Income Investors?

(NYSE:ALE) be an attractive dividend share to own for the long haul? … Yet sometimes, investors buy a stock for its dividend and lose money because the share price falls by more than they earned in dividend payments. … NYSE:ALE Historical Dividend Yield, April 18th 2019

Simply Wall St -

How Did ALLETE, Inc.'s (NYSE:ALE) 8.1% ROE Fare Against The Industry?

With that in mind, this article will work through how we can use Return On Equity (ROE) to better understand a business. … Our data shows ALLETE has a return on equity of 8.1% for the last year. … Return on Equity = Net Profit ÷ Shareholders' Equity

Simply Wall St -

What does ALLETE, Inc.'s (NYSE:ALE) Balance Sheet Tell Us About Its Future?

This article will examine ALE’s financial liquidity and debt levels to get an idea of whether the company can deal with cyclical downturns and maintain funds to accommodate strategic spending for future growth. … Note that this commentary is very high-level and solely focused on financial health, so I suggest you dig deeper yourself. … Does ALE Produce Much Cash Relative To Its Debt?

Simply Wall St -

The ALLETE (NYSE:ALE) Share Price Is Up 61% And Shareholders Are Holding On

(NYSE:ALE) share price is up 61% in the last 5 years, clearly besting than the market return of around 42% (ignoring dividends). … By comparing earnings per share (EPS) and share price changes over time, we can get a feel for how investor attitudes to a company have morphed over time. … During five years of share price growth, ALLETE achieved compound earnings per share (EPS) growth of 5.2% per year.

Simply Wall St -

Is ALLETE, Inc.’s (NYSE:ALE) Cash Outlook Optimistic?

I will take you through ALLETE’s cash flow health and the risk-return concept based on the stock’s cash flow yield, using the most recent financial data. … ALLETE generates cash through its day-to-day business, which needs to be reinvested into the company in order for it to continue operating. … There are two methods I will use to evaluate the quality of ALLETE’s FCF: firstly, I will measure its FCF yield relative to the market index yield; secondly, I will examine whether its operating cash flow will continue to grow into the future, which will give us a sense of sustainability

Simply Wall St -

What Should We Expect From ALLETE, Inc.'s (NYSE:ALE) Earnings Over The Next Few Years?

The most recent earnings announcement ALLETE, Inc.'s (NYSE:ALE) released in December 2018a … indicated

Simply Wall St -

Company Info

Description

ALLETE, Inc. operates as an energy company. The company operates through three segments: Regulated Operations, ALLETE Clean Energy, and U.S. Water Services. It generates electricity from coal-fired, wind, hydroelectric, natural gas-fired, biomass co-fired, solar, and other sources. The company provides regulated utility electric, natural gas, and water 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 16 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 545 megawatt of wind energy generation. Further, it offers integrated water management for industry by combining chemical, equipment, engineering, and service for customized solutions to reduce water and energy usage. Additionally, the company is involved in the coal mining operations in North Dakota; and real estate investment activities in Florida. The company owns and operates 159 substations with a total capacity of 8,531 megavolt amperes. It serves taconite mining, iron concentrate, paper, pulp and wood products, pipeline, and other industries. The company was founded in 1906 and is headquartered in Duluth, Minnesota.

Details
Name: ALLETE, Inc.
ALE
Exchange: NYSE
Founded: 1906
$4,258,498,570
51,624,422
Website: http://www.allete.com
Address: ALLETE, Inc.
30 West Superior Street,
Duluth,
Minnesota, 55802,
United States
Listings
Exchange Symbol Ticker Symbol Security Exchange Country Currency Listed on
NYSE ALE Common Stock New York Stock Exchange US USD 02. Jan 1968
DB AEBA Common Stock Deutsche Boerse AG DE EUR 02. Jan 1968
Number of employees
Current staff
Staff numbers
1,345
ALLETE employees.
Industry
Electric Utilities
Utilities
Company Analysis and Financial Data Status
Area Date (UTC time)
Company Analysis updated: 2019/05/24 23:32
End of day share price update: 2019/05/24 00:00
Last estimates confirmation: 2019/05/20
Last earnings filing: 2019/05/02
Last earnings reported: 2019/03/31
Last annual earnings reported: 2018/12/31


All dates and times in UTC. All financial data provided by Standard & Poor’s Capital IQ.

Unless specified all financial data is based on a yearly period but updated quarterly. This is known as Trailing Twelve Month (TTM) or Last Twelve Month (LTM) Data. Learn more here.