Allete Inc (ALE)
Return on total capital
| Dec 31, 2024 | Sep 30, 2024 | Jun 30, 2024 | Mar 31, 2024 | Dec 31, 2023 | Sep 30, 2023 | Jun 30, 2023 | Mar 31, 2023 | Dec 31, 2022 | Sep 30, 2022 | Jun 30, 2022 | Mar 31, 2022 | Dec 31, 2021 | Sep 30, 2021 | Jun 30, 2021 | Mar 31, 2021 | Dec 31, 2020 | Sep 30, 2020 | Jun 30, 2020 | Mar 31, 2020 | ||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Earnings before interest and tax (EBIT) (ttm) | US$ in thousands | 187,900 | 228,700 | 309,100 | 351,900 | 355,800 | 336,700 | 255,900 | 231,600 | 233,300 | 245,100 | 240,200 | 233,600 | 211,400 | 180,200 | 191,700 | 177,900 | 187,600 | 210,600 | 204,000 | 222,200 |
| Long-term debt | US$ in thousands | 1,704,700 | 1,743,700 | 1,746,000 | 1,772,400 | 1,679,900 | 1,686,100 | 1,685,900 | 1,755,500 | 1,648,200 | 1,653,000 | 1,595,600 | 1,669,400 | 1,763,200 | 1,649,400 | 1,664,600 | 1,652,400 | 1,593,200 | 1,608,000 | 1,381,000 | 1,399,900 |
| Total stockholders’ equity | US$ in thousands | 2,848,000 | 2,831,200 | 2,821,700 | 2,823,000 | 2,809,600 | 2,786,600 | 2,734,100 | 2,715,500 | 2,691,900 | 2,682,600 | 2,680,400 | 2,449,300 | 2,404,300 | 2,340,000 | 2,322,600 | 2,320,700 | 2,294,600 | 2,281,000 | 2,265,700 | 2,271,100 |
| Return on total capital | 4.13% | 5.00% | 6.77% | 7.66% | 7.93% | 7.53% | 5.79% | 5.18% | 5.38% | 5.65% | 5.62% | 5.67% | 5.07% | 4.52% | 4.81% | 4.48% | 4.83% | 5.42% | 5.59% | 6.05% |
December 31, 2024 calculation
Return on total capital = EBIT (ttm) ÷ (Long-term debt + Total stockholders’ equity)
= $187,900K ÷ ($1,704,700K + $2,848,000K)
= 4.13%
The return on total capital for Allete Inc has shown fluctuations over the analyzed period from March 31, 2020, to December 31, 2024. Initially, the return on total capital was around 6%, which then decreased gradually to around 4.5% by March 31, 2021. The ratio slightly recovered in the following quarters, reaching a peak of 7.93% by December 31, 2023.
However, the return on total capital declined again to 4.13% by December 31, 2024. This fluctuation indicates that Allete Inc's efficiency in generating returns from its total capital has been inconsistent over the period, with both highs and lows.
It is essential for stakeholders and investors to closely monitor this ratio to assess the company's ability to utilize its total capital effectively and generate sustainable returns in the long term. Additionally, management should focus on strategies to improve and stabilize the return on total capital to enhance overall financial performance and shareholder value.
Peer comparison
Dec 31, 2024