Yahoo Finance Interested In ALLETE, Inc. (NYSE:ALE)? Here's What Its Recent Performance Looks Like
For investors with a long-term horizon, assessing earnings trend over time and against industry benchmarks is more valuable than looking at a single earnings announcement in one point in time. Investors may find my commentary, albeit very high-level and brief, on ALLETE, Inc. (NYSE:ALE) useful as an attempt to give more color around how ALLETE is currently performing.
View our latest analysis for ALLETE
Did ALE's recent earnings growth beat the long-term trend and the industry?
ALE's trailing twelve-month earnings (from 31 December 2019) of US$186m has increased by 6.6% compared to the previous year.
However, this one-year growth rate has been lower than its average earnings growth rate over the past 5 years of 7.8%, indicating the rate at which ALE is growing has slowed down. Why could this be happening? Well, let's examine what's going on with margins and if the rest of the industry is experiencing the hit as well.
In terms of returns from investment, ALLETE has fallen short of achieving a 20% return on equity (ROE), recording 7.9% instead. However, its return on assets (ROA) of 4.5% exceeds the US Electric Utilities industry of 4.4%, indicating ALLETE has used its assets more efficiently. Though, its return on capital (ROC), which also accounts for ALLETE’s debt level, has declined over the past 3 years from 4.8% to 3.8%.
What does this mean?
Though ALLETE's past data is helpful, it is only one aspect of my investment thesis. Positive growth and profitability are what investors like to see in a company’s track record, but how do we properly assess sustainability? I suggest you continue to research ALLETE to get a more holistic view of the stock by looking at:
Future Outlook: What are well-informed industry analysts predicting for ALE’s future growth? Take a look at our free research report of analyst consensus for ALE’s outlook.
Financial Health: Are ALE’s operations financially sustainable? Balance sheets can be hard to analyze, which is why we’ve done it for you. Check out our financial health checks here.
Other High-Performing Stocks: Are there other stocks that provide better prospects with proven track records? Explore our free list of these great stocks here.
NB: Figures in this article are calculated using data from the trailing twelve months from 31 December 2019. This may not be consistent with full year annual report figures.
If you spot an error that warrants correction, please contact the editor at editorial-team@simplywallst.com. This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. Simply Wall St has no position in the stocks mentioned.
We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Thank you for reading.
