Allete (ALE) vs. Its Peers Critical Survey
Allete (NYSE: ALE) is one of 81 publicly-traded companies in the “Electric Utilities” industry, but how does it compare to its peers? We will compare Allete to similar companies based on the strength of its analyst recommendations, dividends, profitability, risk, institutional ownership, earnings and valuation.
Volatility & Risk
Allete has a beta of 0.47, indicating that its stock price is 53% less volatile than the S&P 500. Comparatively, Allete’s peers have a beta of 0.66, indicating that their average stock price is 34% less volatile than the S&P 500.
Allete pays an annual dividend of $2.14 per share and has a dividend yield of 2.8%. Allete pays out 61.8% of its earnings in the form of a dividend. As a group, “Electric Utilities” companies pay a dividend yield of 3.2% and pay out 102.1% of their earnings in the form of a dividend. Allete has raised its dividend for 6 consecutive years.
This is a summary of recent recommendations for Allete and its peers, as provided by MarketBeat.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
Allete currently has a consensus price target of $76.67, indicating a potential upside of 0.43%. As a group, “Electric Utilities” companies have a potential upside of 7.67%. Given Allete’s peers stronger consensus rating and higher probable upside, analysts clearly believe Allete has less favorable growth aspects than its peers.
Earnings and Valuation
This table compares Allete and its peers revenue, earnings per share and valuation.
|Gross Revenue||NetIncome||Price/Earnings Ratio|
|Allete||$1.34 billion||$155.30 million||22.06|
|Allete Competitors||$7.66 billion||$831.80 million||44.93|
Allete’s peers have higher revenue and earnings than Allete. Allete is trading at a lower price-to-earnings ratio than its peers, indicating that it is currently more affordable than other companies in its industry.
This table compares Allete and its peers’ net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
Institutional and Insider Ownership
70.2% of Allete shares are owned by institutional investors. Comparatively, 65.4% of shares of all “Electric Utilities” companies are owned by institutional investors. 0.4% of Allete shares are owned by company insiders. Comparatively, 2.7% of shares of all “Electric Utilities” companies are owned by company insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a company will outperform the market over the long term.
Allete peers beat Allete on 10 of the 15 factors compared.
ALLETE, Inc. is an energy company. The Company’s segments include Regulated Operations, ALLETE Clean Energy, Inc. (ALLETE Clean Energy), U.S. Water Services Holding Company (U.S. Water Services), and Corporate and Other. The Regulated Operations segment includes its regulated utilities, Minnesota Power, and Superior Water, Light and Power Company, and its investment in American Transmission Company LLC. The ALLETE Clean Energy segment focuses on developing, acquiring and operating clean and renewable energy projects. The U.S. Water Services provides integrated water management for industry by combining chemical, equipment, engineering and service for customized solution. As of December 31, 2016, its Corporate and Other consisted of BNI Energy, Inc. (BNI Energy), its coal mining operations in North Dakota, ALLETE Properties, LLC (ALLETE Properties), its Florida real estate investment and approximately 5,000 acres of land in Minnesota.
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