Allete Inc (ALE)
Return on total capital
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | ||
|---|---|---|---|---|---|---|
| Earnings before interest and tax (EBIT) | US$ in thousands | 160,100 | 355,800 | 233,300 | 211,400 | 187,600 |
| Long-term debt | US$ in thousands | 1,704,700 | 1,679,900 | 1,648,200 | 1,763,200 | 1,593,200 |
| Total stockholders’ equity | US$ in thousands | 2,848,000 | 2,809,600 | 2,691,900 | 2,404,300 | 2,294,600 |
| Return on total capital | 3.52% | 7.93% | 5.38% | 5.07% | 4.83% |
December 31, 2024 calculation
Return on total capital = EBIT ÷ (Long-term debt + Total stockholders’ equity)
= $160,100K ÷ ($1,704,700K + $2,848,000K)
= 3.52%
To analyze Allete Inc's return on total capital over the years, we observe the following trend:
- In December 2020, the return on total capital was 4.83%. This indicates that, for every dollar of total capital invested, the company generated a return of 4.83%.
- By December 2021, the return on total capital improved to 5.07%, reflecting a slight increase in the efficiency of capital utilization.
- The trend continued to improve in December 2022, with the return on total capital reaching 5.38%, indicating further enhancement in capital productivity.
- In December 2023, the return on total capital saw a significant boost, rising to 7.93%. This substantial increase suggests a more effective use of total capital, leading to higher returns for investors.
- However, by December 2024, the return on total capital decreased to 3.52%, reflecting a decline in capital efficiency compared to the previous year.
In summary, the trend shows fluctuations in Allete Inc's return on total capital over the years, with notable improvements in some periods and a decrease in others. It is important for the company to consistently monitor and optimize its capital allocation to maintain or enhance its returns for investors.
Peer comparison
Dec 31, 2024