Allete (NYSE: ALE) is one of 81 publicly-traded companies in the “Electric Utilities” industry, but how does it weigh in compared to its competitors? We will compare Allete to similar companies based on the strength of its analyst recommendations, risk, dividends, valuation, profitability, earnings and institutional ownership.

Institutional & 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 insiders. Comparatively, 2.7% of shares of all “Electric Utilities” companies are owned by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a company will outperform the market over the long term.

Dividends

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 3.1% and pay out 104.0% of their earnings in the form of a dividend. Allete has raised its dividend for 6 consecutive years.

Profitability

This table compares Allete and its competitors’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Allete 12.31% 9.21% 3.71%
Allete Competitors -6.56% 8.27% 2.59%

Volatility and Risk

Allete has a beta of 0.47, meaning that its share price is 53% less volatile than the S&P 500. Comparatively, Allete’s competitors have a beta of 0.66, meaning that their average share price is 34% less volatile than the S&P 500.

Valuation and Earnings

This table compares Allete and its competitors gross revenue, earnings per share (EPS) and valuation.

Gross Revenue NetIncome Price/Earnings Ratio
Allete $1.34 billion $155.30 million 22.37
Allete Competitors $7.66 billion $831.80 million 50.50

Allete’s competitors have higher revenue and earnings than Allete. Allete is trading at a lower price-to-earnings ratio than its competitors, indicating that it is currently more affordable than other companies in its industry.

Analyst Recommendations

This is a breakdown of recent ratings and recommmendations for Allete and its competitors, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Allete 1 2 0 0 1.67
Allete Competitors 533 2958 2383 42 2.33

Allete currently has a consensus target price of $77.67, indicating a potential upside of 0.36%. As a group, “Electric Utilities” companies have a potential upside of 6.37%. Given Allete’s competitors stronger consensus rating and higher possible upside, analysts plainly believe Allete has less favorable growth aspects than its competitors.

Summary

Allete competitors beat Allete on 10 of the 15 factors compared.

Allete Company Profile

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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