Date of Award
Project (696 or 796 registration)
Master of Science in Accounting & Finance
Allete, Energy, Valuation, Financial statement analysis, SWOT, Porter's five forces
This analysis and evaluation of ALLETE, Inc. is based on historical quantitative and qualitative data. ALLETE, Inc. (NYSE: ALE) is an electric utility provider in the upper Midwest region of the U.S. Their primary business activities involve producing and delivering electricity to customers. Over the course of the last five years, ALE has maintained a consistent customer base. This aligns with the nature of their business as it is a heavily regulated industry where growth and competition are limited geographically.
ALE appears to be a healthy business that is in good standing with the government and regulatory agencies that enforce laws and regulations in the energy sector. These agencies include the United States Environmental Protection Agency (USEPA), Minnesota Pollution Control Agency (MPCA), Minnesota Public Utilities Commission (MPUC), North Dakota Public Service Commission (NDPSC), Securities and Exchange Commission (SEC), and a few other regional commissions, agencies, and regulatory bodies. Based on a SWOT analysis and Porter’s Five Forces, ALE is positioned to be a strong company in the future if they can maintain dominance and an entrepreneurial spirit.
Due to the reasons discussed in this paper it appears that ALE’s common stock is overvalued. The value of the common stock as of 12/31/2019 is $81.39 (Allete, Inc. (ALE) Stock Historical Prices & Data) this is overvalued based on an analysis of ALE’s company. Purely quantitative, financial analysis indicates that a fair price for ALE’s stock is closer to $72.48 on 12/31/2019. Due to this information and other qualitative information, it is recommended that investors SELL their current positions in ALE.
Tolson, Alec, "Allete Financial Analysis and Valuation" (2021). Dissertations, Theses, and Projects. 544.