NYSE:ALE

Stock Analysis Report

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Executive Summary

ALLETE, Inc. operates as an energy company.


Snowflake Analysis

Established dividend payer and good value.


Similar Companies

Share Price & News

How has ALLETE's share price performed over time and what events caused price changes?


Latest Share Price and Events

Stable Share Price: ALE's share price has been volatile over the past 3 months.


Market Performance


7 Day Return

9.8%

ALE

5.8%

US Electric Utilities

2.9%

US Market


1 Year Return

-28.3%

ALE

3.4%

US Electric Utilities

9.5%

US Market

Return vs Industry: ALE underperformed the US Electric Utilities industry which returned 3.4% over the past year.

Return vs Market: ALE underperformed the US Market which returned 9.5% over the past year.


Shareholder returns

ALEIndustryMarket
7 Day9.8%5.8%2.9%
30 Day5.5%3.7%5.1%
90 Day-21.1%-5.4%2.5%
1 Year-25.8%-28.3%6.6%3.4%12.0%9.5%
3 Year-13.1%-20.8%21.7%10.1%30.8%22.1%
5 Year41.2%19.8%68.2%41.1%57.4%39.7%

Price Volatility Vs. Market

How volatile is ALLETE's share price compared to the market and industry in the last 5 years?


Simply Wall St News

Valuation

Is ALLETE undervalued compared to its fair value and its price relative to the market?

>50%

Undervalued compared to fair value


Share Price vs. Fair Value

Below Fair Value: ALE ($58.73) is trading below our estimate of fair value ($231.09)

Significantly Below Fair Value: ALE is trading below fair value by more than 20%.


Price To Earnings Ratio

PE vs Industry: ALE is good value based on its PE Ratio (16.7x) compared to the Electric Utilities industry average (20x).

PE vs Market: ALE is poor value based on its PE Ratio (16.7x) compared to the US market (15.8x).


Price to Earnings Growth Ratio

PEG Ratio: ALE is poor value based on its PEG Ratio (2.7x)


Price to Book Ratio

PB vs Industry: ALE is good value based on its PB Ratio (1.3x) compared to the US Electric Utilities industry average (2x).


Next Steps

Future Growth

How is ALLETE forecast to perform in the next 1 to 3 years based on estimates from 4 analysts?

6.2%

Forecasted annual earnings growth


Earnings and Revenue Growth Forecasts


Analyst Future Growth Forecasts

Earnings vs Savings Rate: ALE's forecast earnings growth (6.2% per year) is above the savings rate (2.2%).

Earnings vs Market: ALE's earnings (6.2% per year) are forecast to grow slower than the US market (22% per year).

High Growth Earnings: ALE's earnings are forecast to grow, but not significantly.

Revenue vs Market: ALE's revenue (4.8% per year) is forecast to grow slower than the US market (8.8% per year).

High Growth Revenue: ALE's revenue (4.8% per year) is forecast to grow slower than 20% per year.


Earnings per Share Growth Forecasts


Future Return on Equity

Future ROE: ALE's Return on Equity is forecast to be low in 3 years time (8.4%).


Next Steps

Past Performance

How has ALLETE performed over the past 5 years?

7.1%

Historical annual earnings growth


Earnings and Revenue History

Quality Earnings: ALE has high quality earnings.

Growing Profit Margin: ALE's current net profit margins (15.2%) are higher than last year (12.9%).


Past Earnings Growth Analysis

Earnings Trend: ALE's earnings have grown by 7.1% per year over the past 5 years.

Accelerating Growth: ALE's has had negative earnings growth over the past year, so it can't be compared to its 5-year average.

Earnings vs Industry: ALE had negative earnings growth (-6.3%) over the past year, making it difficult to compare to the Electric Utilities industry average (1.8%).


Return on Equity

High ROE: ALE's Return on Equity (7.6%) is considered low.


Next Steps

Financial Health

How is ALLETE's financial position?


Financial Position Analysis

Short Term Liabilities: ALE's short term assets ($274.8M) do not cover its short term liabilities ($623.1M).

Long Term Liabilities: ALE's short term assets ($274.8M) do not cover its long term liabilities ($2.6B).


Debt to Equity History and Analysis

Debt Level: ALE's debt to equity ratio (72.6%) is considered high.

Reducing Debt: ALE's debt to equity ratio has reduced from 77.7% to 72.6% over the past 5 years.

Debt Coverage: ALE's debt is not well covered by operating cash flow (15%).

Interest Coverage: ALE's interest payments on its debt are well covered by EBIT (3.2x coverage).


Balance Sheet


Next Steps

Dividend

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

4.21%

Current Dividend Yield


Dividend Yield vs Market

Notable Dividend: ALE's dividend (4.21%) is higher than the bottom 25% of dividend payers in the US market (1.69%).

High Dividend: ALE's dividend (4.21%) is low compared to the top 25% of dividend payers in the US market (4.52%).


Stability and Growth of Payments

Stable Dividend: ALE's dividends per share have been stable in the past 10 years.

Growing Dividend: ALE's dividend payments have increased over the past 10 years.


Current Payout to Shareholders

Dividend Coverage: With its reasonable payout ratio (67.7%), ALE's dividend payments are covered by earnings.


Future Payout to Shareholders

Future Dividend Coverage: ALE's dividends in 3 years are forecast to be covered by earnings (64.3% payout ratio).


Next Steps

Management

How experienced are the management team and are they aligned to shareholders interests?

3.3yrs

Average management tenure


CEO

Bethany Owen (53yo)

0.17

Tenure

US$1,010,272

Compensation

Ms. Bethany M. Owen has been Chief Executive Officer of ALLETE, Inc. since February 3, 2020. Ms. Owen serves as a President at ALLETE, Inc. since January 31, 2019 and has been its Director since February 1 ...


CEO Compensation Analysis

Compensation vs Market: Bethany's total compensation ($USD1.01M) is below average for companies of similar size in the US market ($USD5.91M).

Compensation vs Earnings: Bethany's compensation has been consistent with company performance over the past year.


Leadership Team

NamePositionTenureCompensationOwnership
Alan Hodnik
Executive Chairman9yrsUS$4.71m0.10% $3.1m
Bethany Owen
CEO, President & Director0.17yrUS$1.01m0.026% $803.6k
Robert Adams
Senior VP & CFO3.17yrsUS$1.64m0.025% $763.4k
Steven Morris
VP, Controller & Chief Accounting Officer3.42yrsUS$633.75k0.012% $368.0k
Nicole Johnson
VP & Chief Administrative Officer0.83yrUS$595.15k0.0096% $291.1k
Vincent Meyer
Vice President of Investor Relationsno datano datano data
Margaret Thickens
VP, Chief Legal Officer & Corporate Secretary1.17yrsno data0.0047% $142.9k
Wade Boeshans
President & GM of BNI Energy7.33yrsno datano data
Al Rudeck
President of Allete Clean Energy3.83yrsno datano data
Patrick Cutshall
VP & Corporate Treasurer4.33yrsno data0.0095% $290.5k

3.3yrs

Average Tenure

54yo

Average Age

Experienced Management: ALE's management team is considered experienced (3.3 years average tenure).


Board Members

NamePositionTenureCompensationOwnership
Alan Hodnik
Executive Chairman9yrsUS$4.71m0.10% $3.1m
Bethany Owen
CEO, President & Director0.17yrUS$1.01m0.026% $803.6k
Heidi Jimmerson
Independent Lead Director6yrsUS$185.95k0.030% $920.7k
Kathryn Dindo
Independent Director10.83yrsUS$164.95k0.021% $641.4k
Madeleine Ludlow
Independent Director15.58yrsUS$165.95k0.020% $617.7k
Robert Powers
Independent Director2.75yrsUS$160.95k0.0013% $38.9k
Susan Nestegard
Independent Director2.33yrsUS$153.45k0.0013% $40.1k
Douglas Neve
Independent Director12.83yrsUS$162.45k0.024% $743.3k
James Hoolihan
Independent Director14yrsUS$155.95k0.015% $466.6k
George Goldfarb
Independent Director7.58yrsUS$154.95k0.0051% $154.8k

8.3yrs

Average Tenure

62.5yo

Average Age

Experienced Board: ALE's board of directors are considered experienced (8.3 years average tenure).


Ownership

Who are the major shareholders and have insiders been buying or selling?


Insider Trading Volume

Insider Buying: Insufficient data to determine if insiders have bought more shares than they have sold in the past 3 months.


Recent Insider Transactions

Ownership Breakdown

Dilution of Shares: Shareholders have not been meaningfully diluted in the past year.


Top Shareholders

Company Information

ALLETE, Inc.'s company bio, employee growth, exchange listings and data sources


Key Information

  • Name: ALLETE, Inc.
  • Ticker: ALE
  • Exchange: NYSE
  • Founded: 1906
  • Industry: Electric Utilities
  • Sector: Utilities
  • Market Cap: US$3.041b
  • Shares outstanding: 51.79m
  • Website: https://www.allete.com

Number of Employees


Location

  • ALLETE, Inc.
  • 30 West Superior Street
  • Duluth
  • Minnesota
  • 55802-2093
  • United States

Listings

TickerExchangePrimary SecuritySecurity TypeCountryCurrencyListed on
ALENYSE (New York Stock Exchange)YesCommon StockUSUSDJan 1968
AEBADB (Deutsche Boerse AG)YesCommon StockDEEURJan 1968

Biography

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, hydroelectric, natural gas-fired, biomass co-fired, and solar. The company provides regulated utility electric and natural gas in northwestern Wisconsin to approximately 15,000 electric customers and 13,000 natural gas 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 660 megawatt of wind energy generation. 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 8,875 megavolt amperes. It serves taconite mining, paper, pulp and secondary wood products, pipeline, and other industries. ALLETE, Inc. was founded in 1906 and is headquartered in Duluth, Minnesota. 


Company Analysis and Financial Data Status

All financial data provided by Standard & Poor's Capital IQ.
DataLast Updated (UTC time)
Company Analysis2020/05/31 03:11
End of Day Share Price2020/05/29 00:00
Earnings2020/03/31
Annual Earnings2019/12/31


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.