Allete Inc (ALE)

Return on equity (ROE)

Dec 31, 2024 Dec 31, 2023 Dec 31, 2022 Dec 31, 2021 Dec 31, 2020
Net income US$ in thousands 179,300 247,100 189,300 169,200 165,400
Total stockholders’ equity US$ in thousands 2,848,000 2,809,600 2,691,900 2,404,300 2,294,600
ROE 6.30% 8.79% 7.03% 7.04% 7.21%

December 31, 2024 calculation

ROE = Net income ÷ Total stockholders’ equity
= $179,300K ÷ $2,848,000K
= 6.30%

Allete Inc's return on equity (ROE) has shown some fluctuations over the past five years. In December 2020, the ROE was at 7.21%, and by December 2021, it slightly decreased to 7.04%. The trend continued into December 2022, with a further decrease to 7.03%. However, there was a notable improvement in December 2023, where the ROE increased to 8.79%, indicating a more efficient utilization of shareholders' equity to generate profits.

Unfortunately, by December 2024, the ROE dropped to 6.30%, which is lower compared to the previous year. This decline may suggest a decrease in the company's profitability relative to its equity base, warranting further investigation to identify the underlying reasons for this downturn.

Overall, while Allete Inc's ROE has demonstrated some variability, it is essential for stakeholders to monitor this metric closely to assess the company's ability to generate returns for its shareholders efficiently and sustainably.