Allete Inc

Utilities
Power Generation
www.allete.com

Earnings Score
Moat Score
Safety Score

Market Cap $2.60B
PE 22
Debt $1.84B
Cash $111.00M
EV $4.32B
FCF $115.20M

Earnings

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Sales & Net Margins

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Earnings	$120.40M
EBIT	$160.50M
ROE	4%
ROA	2%
FCF	$115.20M
Equity	$3.39B
Growth Stability	79%
PE	21.58
PEG	-9.28
PB	0.77
P/FCF	22.55
P/S	1.66
Price/Cash	0.04
Debt/Equity	0.54
Debt/FCF	15.94
Net Margins	8%
Gross Margins	91%
Op. Margins	10%
Earnings CAGR	-1%
Sales Growth YoY	7%
Sales Growth QoQ	15%
Sales CAGR	2%
FCF CAGR	1%
Equity CAGR	9%
Earnings Stability	0.04
Earnings Growth YoY	-53%
Earnings Growth QoQ	66%
Earnings CAGR 5Y	-2%

Sales CAGR 5Y	11%
FCF CAGR 5Y	19%
Equity CAGR 5Y	9%
Earnings CAGR 3Y	6%
Sales CAGR 3Y	6%
FCF CAGR 3Y	383%
Equity CAGR 3Y	4%
Market Cap	$2.60B
Revenue	$1.57B
Dividend Yield	6%
Payout Ratio	134%
Assets	$6.74B
Total Debt	$1.84B
Cash	$111.00M
Shares Outstanding	40.09M
EV	4.32B
Earnings Score	6%
Moat Score	49%
Safety Score	73%
Final Score	43%
Working Capital	149M
Current Ratio	1.45
Gross Profit	$1.43B
Shares Growth 3y	18%
Equity Growth QoQ	-0%
Equity Growth YoY	-0%

Assets & ROA

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Stockholders Equity & ROE

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ALLETE Inc is a regulated electric utility company operating primarily in America's Upper Midwest region. Through its subsidiaries, ALLETE provides regulated electric, natural gas, and water services. The company's Regulated Operations division, which houses its energy generation, transmission, and distribution activities, is responsible for most of ALLETE's total revenue by way of electricity sales and transmission service fees. The majority of the energy sold and distributed by ALLETE is produced by its own portfolio of coal-fired, wind, natural gas-fired, biomass, and hydroelectric power plants. Coal fuel sources, specifically, account for most of this. The company's major customers are industrial entities, such as major iron ore, wood product, and pipeline producers.

SEC Filings

Direct access to Allete Inc (ALE) Annual Reports (10K) and Quarterly Reports (10Q) from the SEC website.

2024
- 10-Q Sep 30
- 10-Q Jun 30
- 10-Q Mar 31
2023
- 10-K Dec 31
- 10-Q Sep 30
- 10-Q Jun 30
- 10-Q Mar 31
2022
- 10-K Dec 31
- 10-Q Sep 30
- 10-Q Jun 30
- 10-Q Mar 31

Sector Comparison

How does Allete Inc compare to its competitors?

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Peter Lynch's Chart

This chart shows the current pricing of Allete Inc compared to its past. The addition of the earnings trend line provides further insights into the company's earnings power.

CAGR -1%

Stability 4%

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Allete Inc Discounted Cash Flow

Fully customizable DCF calculator online for Allete Inc.

Years

Calculation mode

= $1.2B

	0	1	2	3	4	5	6	7	8	9	10	TV
fcf	$115M	$116M	$117M	$118M	$119M	$120M	$121M	$122M	$123M	$125M	$126M	$1.3B
DCF		$106M	$97M	$89M	$81M	$75M	$68M	$63M	$58M	$53M	$48M	$484M
Value	$1.2B

Competitiveness and MOAT

High margins render the company resilient under dire circumstances, hence able to drive competitors out or acquire them. ROE and ROA measure the average flow generated by each invested dollar. Their marginal value is a forecast of future growth, and it is considered by Buffett and Munger the most important single indicator.

Years	12/2014	12/2015	12/2016	12/2017	12/2018	12/2019	12/2020	12/2021	12/2022	12/2023	TTM
Net Margins	11%	9%	12%	12%	12%	15%	14%	10%	8%	10%	8%
ROA	-	4%	5%	5%	4%	3%	2%	2%	2%	3%	2%
ROE	-	8%	8%	8%	8%	8%	6%	5%	4%	5%	4%

Net Margins (7.67%)

Net Margins are at a level that is not too high nor too low. They are not a competitive advantage but they are not a competitive disadvantage either.

Safety and Stability

Being debt the number one cause of investment losses and company death, the ratio Debt/FCF is of utmost importance to guarantee safety. On the other hand the Graham’s stability measures the drawdown of earnings, hence indicating the reliability of the flow generated by the company.

Years	12/2014	12/2015	12/2016	12/2017	12/2018	12/2019	12/2020	12/2021	12/2022	12/2023	TTM
Debt over FCF	-	30.82	26.46	8.11	12.86	-5.28	-4.81	-10.49	2.75K	6.08	15.94
Debt over Equity	0.92	0.9	0.93	0.76	0.72	0.79	0.72	0.75	0.66	0.56	0.54
Growth Stability	-	-	-	100%	100%	100%	91%	79%	81%	100%	79%

Bad Debt/FCF ratio (15.94)

Net Margins are too low to guarantee profitability in case of higher costs or higher interest rates. Furthermore lower margins cause higher earnings’ volatility.

Good Debt/Equity ratio (0.54)

The company is not overleveraged and has a good balance between equity and debt.

Bad Graham’s Stability (79%)

The company has a bad stability in its earnings, which is a sign of a bad competitive advantage.

Growth

Growth can be dangerous when forecasting, simply projecting the current growth is in general wrong. A company passes through multiple phases, from being young and unprofitable, to the first periods of profitability and high growth, until it arrives at a period of regime with limited growth. Identifying in which phase the company is in may help forecasting.

Years	12/2014	12/2015	12/2016	12/2017	12/2018	12/2019	12/2020	12/2021	12/2022	12/2023	CAGR 5Y
Revenue YoY growth	-	31%	-10%	6%	6%	-17%	-6%	21%	11%	20%	11%
Earnings YoY growth	-	13%	10%	11%	1%	7%	-13%	-15%	-5%	36%	-2%
Equity YoY growth	-	13%	4%	9%	4%	8%	20%	5%	14%	2%	9%
FCF YoY growth	-	-118%	25%	193%	-38%	-388%	20%	-50%	-100%	39K%	19%