Intrinsic value of Allete, Inc. - ALE

Previous Close

$82.23

  Intrinsic Value

$9.38

stock screener

  Rating & Target

str. sell

-89%

Previous close

$82.23

 
Intrinsic value

$9.38

 
Up/down potential

-89%

 
Rating

str. sell

We calculate the intrinsic value of ALE stock by summing up the current values of future distributable cash flows generated by the company and dividing the sum by the number of outstanding shares. As such, the intrinsic value calculation depends entirely on projections. The more accurate your projections of the company's performance are - the more reliable is the intrinsic value calculation result. Please make sure to check the stock valuation input data below and adjust it if necessary. The quality of the output (intrinsic valuation result) is only as good as the quality of the input. See also DISCLAIMERS.

STOCK VALUATION INPUT DATA

Revenue (in 0001), $M
Initial revenue growth rate, %
Terminal revenue growth rate, %
Revenue decline factor
Initial discount rate, %
Discount rate multiplier
Variable cost ratio, %
Fixed operating expenses, $M
Interest rate on debt, %
Effective corporate tax rate, %
Production assets / Revenue, %
Life of production assets, yrs
Working capital / Revenue, %
Revenue / Adjusted assets
Adjusted equity ratio
Cash flow adjustment, % of Revenue
Book value of equity, $M
Shares outstanding, mln
Market capitalization, $bln 4.2

 

FINANCIAL STATEMENTS FORECAST and PRESENT VALUE CALCULATION

Fiscal year
   2
   3
   4
   5
   6
   7
   8
   9
   10
   11
   12
   13
   14
   15
   16
   17
   18
   19
   20
   21
   22
   23
   24
   25
   26
   27
   28
   29
   30
   31

INCOME STATEMENT

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Revenue growth rate, %
  32.70
  29.93
  27.44
  25.19
  23.17
  21.36
  19.72
  18.25
  16.92
  15.73
  14.66
  13.69
  12.82
  12.04
  11.34
  10.70
  10.13
  9.62
  9.16
  8.74
  8.37
  8.03
  7.73
  7.46
  7.21
  6.99
  6.79
  6.61
  6.45
  6.30
Revenue, $m
  1,989
  2,585
  3,294
  4,123
  5,079
  6,164
  7,379
  8,726
  10,203
  11,808
  13,538
  15,392
  17,366
  19,457
  21,663
  23,981
  26,411
  28,952
  31,603
  34,366
  37,242
  40,233
  43,342
  46,573
  49,931
  53,420
  57,047
  60,818
  64,741
  68,823
Variable operating expenses, $m
  1,666
  2,157
  2,743
  3,429
  4,218
  5,114
  6,118
  7,231
  8,451
  9,777
  11,184
  12,716
  14,346
  16,074
  17,896
  19,812
  21,819
  23,918
  26,108
  28,391
  30,766
  33,237
  35,806
  38,475
  41,249
  44,132
  47,128
  50,244
  53,484
  56,856
Fixed operating expenses, $m
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Total operating expenses, $m
  1,666
  2,157
  2,743
  3,429
  4,218
  5,114
  6,118
  7,231
  8,451
  9,777
  11,184
  12,716
  14,346
  16,074
  17,896
  19,812
  21,819
  23,918
  26,108
  28,391
  30,766
  33,237
  35,806
  38,475
  41,249
  44,132
  47,128
  50,244
  53,484
  56,856
Operating income, $m
  324
  427
  550
  695
  861
  1,049
  1,261
  1,495
  1,752
  2,031
  2,354
  2,676
  3,020
  3,383
  3,767
  4,170
  4,592
  5,034
  5,495
  5,975
  6,475
  6,996
  7,536
  8,098
  8,682
  9,289
  9,919
  10,575
  11,257
  11,967
EBITDA, $m
  604
  785
  1,001
  1,253
  1,543
  1,873
  2,242
  2,652
  3,100
  3,588
  4,114
  4,677
  5,277
  5,913
  6,583
  7,287
  8,026
  8,798
  9,604
  10,443
  11,317
  12,226
  13,171
  14,152
  15,173
  16,233
  17,335
  18,481
  19,673
  20,914
Interest expense (income), $m
  68
  80
  134
  198
  275
  365
  469
  587
  719
  865
  1,025
  1,200
  1,387
  1,589
  1,803
  2,030
  2,269
  2,521
  2,785
  3,061
  3,349
  3,648
  3,961
  4,285
  4,623
  4,974
  5,338
  5,717
  6,111
  6,520
  6,946
Earnings before tax, $m
  243
  293
  352
  419
  495
  580
  674
  776
  887
  1,005
  1,154
  1,289
  1,431
  1,580
  1,737
  1,900
  2,071
  2,249
  2,434
  2,627
  2,827
  3,035
  3,251
  3,475
  3,708
  3,950
  4,202
  4,464
  4,737
  5,021
Tax expense, $m
  66
  79
  95
  113
  134
  157
  182
  210
  239
  271
  312
  348
  386
  427
  469
  513
  559
  607
  657
  709
  763
  819
  878
  938
  1,001
  1,067
  1,135
  1,205
  1,279
  1,356
Net income, $m
  178
  214
  257
  306
  362
  424
  492
  567
  647
  734
  843
  941
  1,045
  1,154
  1,268
  1,387
  1,512
  1,642
  1,777
  1,918
  2,064
  2,215
  2,373
  2,537
  2,707
  2,884
  3,068
  3,259
  3,458
  3,665

BALANCE SHEET

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Cash and short-term investments, $m
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Total assets, $m
  6,859
  8,912
  11,357
  14,219
  17,514
  21,254
  25,446
  30,089
  35,181
  40,716
  46,684
  53,077
  59,883
  67,093
  74,699
  82,695
  91,074
  99,835
  108,977
  118,504
  128,420
  138,733
  149,455
  160,596
  172,175
  184,207
  196,714
  209,719
  223,245
  237,320
Adjusted assets (=assets-cash), $m
  6,859
  8,912
  11,357
  14,219
  17,514
  21,254
  25,446
  30,089
  35,181
  40,716
  46,684
  53,077
  59,883
  67,093
  74,699
  82,695
  91,074
  99,835
  108,977
  118,504
  128,420
  138,733
  149,455
  160,596
  172,175
  184,207
  196,714
  209,719
  223,245
  237,320
Revenue / Adjusted assets
  0.290
  0.290
  0.290
  0.290
  0.290
  0.290
  0.290
  0.290
  0.290
  0.290
  0.290
  0.290
  0.290
  0.290
  0.290
  0.290
  0.290
  0.290
  0.290
  0.290
  0.290
  0.290
  0.290
  0.290
  0.290
  0.290
  0.290
  0.290
  0.290
  0.290
Average production assets, $m
  5,275
  6,854
  8,735
  10,935
  13,469
  16,346
  19,570
  23,141
  27,057
  31,314
  35,904
  40,820
  46,055
  51,600
  57,450
  63,599
  70,043
  76,781
  83,812
  91,139
  98,765
  106,697
  114,942
  123,511
  132,416
  141,670
  151,289
  161,290
  171,693
  182,518
Working capital, $m
  -109
  -142
  -181
  -227
  -279
  -339
  -406
  -480
  -561
  -649
  -745
  -847
  -955
  -1,070
  -1,191
  -1,319
  -1,453
  -1,592
  -1,738
  -1,890
  -2,048
  -2,213
  -2,384
  -2,562
  -2,746
  -2,938
  -3,138
  -3,345
  -3,561
  -3,785
Total debt, $m
  2,476
  3,673
  5,098
  6,766
  8,687
  10,868
  13,312
  16,019
  18,988
  22,214
  25,694
  29,420
  33,388
  37,592
  42,027
  46,688
  51,573
  56,681
  62,011
  67,565
  73,346
  79,358
  85,609
  92,105
  98,855
  105,870
  113,161
  120,743
  128,629
  136,834
Total liabilities, $m
  3,999
  5,196
  6,621
  8,290
  10,211
  12,391
  14,835
  17,542
  20,511
  23,737
  27,217
  30,944
  34,912
  39,115
  43,550
  48,211
  53,096
  58,204
  63,534
  69,088
  74,869
  80,882
  87,132
  93,628
  100,378
  107,393
  114,684
  122,266
  130,152
  138,357
Total equity, $m
  2,860
  3,716
  4,736
  5,929
  7,303
  8,863
  10,611
  12,547
  14,671
  16,979
  19,467
  22,133
  24,971
  27,978
  31,150
  34,484
  37,978
  41,631
  45,444
  49,416
  53,551
  57,852
  62,323
  66,969
  71,797
  76,814
  82,030
  87,453
  93,093
  98,962
Total liabilities and equity, $m
  6,859
  8,912
  11,357
  14,219
  17,514
  21,254
  25,446
  30,089
  35,182
  40,716
  46,684
  53,077
  59,883
  67,093
  74,700
  82,695
  91,074
  99,835
  108,978
  118,504
  128,420
  138,734
  149,455
  160,597
  172,175
  184,207
  196,714
  209,719
  223,245
  237,319
Debt-to-equity ratio
  0.870
  0.990
  1.080
  1.140
  1.190
  1.230
  1.250
  1.280
  1.290
  1.310
  1.320
  1.330
  1.340
  1.340
  1.350
  1.350
  1.360
  1.360
  1.360
  1.370
  1.370
  1.370
  1.370
  1.380
  1.380
  1.380
  1.380
  1.380
  1.380
  1.380
Adjusted equity ratio
  0.417
  0.417
  0.417
  0.417
  0.417
  0.417
  0.417
  0.417
  0.417
  0.417
  0.417
  0.417
  0.417
  0.417
  0.417
  0.417
  0.417
  0.417
  0.417
  0.417
  0.417
  0.417
  0.417
  0.417
  0.417
  0.417
  0.417
  0.417
  0.417
  0.417

CASH FLOW

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net income, $m
  178
  214
  257
  306
  362
  424
  492
  567
  647
  734
  843
  941
  1,045
  1,154
  1,268
  1,387
  1,512
  1,642
  1,777
  1,918
  2,064
  2,215
  2,373
  2,537
  2,707
  2,884
  3,068
  3,259
  3,458
  3,665
Depreciation, amort., depletion, $m
  281
  358
  450
  558
  683
  824
  982
  1,157
  1,349
  1,557
  1,760
  2,001
  2,258
  2,529
  2,816
  3,118
  3,433
  3,764
  4,108
  4,468
  4,841
  5,230
  5,634
  6,054
  6,491
  6,945
  7,416
  7,906
  8,416
  8,947
Funds from operations, $m
  459
  572
  707
  864
  1,044
  1,247
  1,474
  1,723
  1,996
  2,291
  2,603
  2,942
  3,302
  3,683
  4,084
  4,505
  4,945
  5,406
  5,886
  6,385
  6,905
  7,446
  8,007
  8,591
  9,198
  9,828
  10,484
  11,165
  11,874
  12,612
Change in working capital, $m
  -27
  -33
  -39
  -46
  -53
  -60
  -67
  -74
  -81
  -88
  -95
  -102
  -109
  -115
  -121
  -128
  -134
  -140
  -146
  -152
  -158
  -164
  -171
  -178
  -185
  -192
  -199
  -207
  -216
  -224
Cash from operations, $m
  485
  605
  746
  910
  1,097
  1,307
  1,540
  1,797
  2,077
  2,380
  2,698
  3,044
  3,411
  3,798
  4,205
  4,632
  5,079
  5,545
  6,031
  6,537
  7,063
  7,610
  8,179
  8,769
  9,383
  10,020
  10,683
  11,373
  12,090
  12,837
Maintenance CAPEX, $m
  -195
  -259
  -336
  -428
  -536
  -660
  -801
  -959
  -1,134
  -1,326
  -1,535
  -1,760
  -2,001
  -2,258
  -2,529
  -2,816
  -3,118
  -3,433
  -3,764
  -4,108
  -4,468
  -4,841
  -5,230
  -5,634
  -6,054
  -6,491
  -6,945
  -7,416
  -7,906
  -8,416
New CAPEX, $m
  -1,300
  -1,579
  -1,881
  -2,201
  -2,534
  -2,877
  -3,224
  -3,571
  -3,916
  -4,257
  -4,590
  -4,916
  -5,234
  -5,545
  -5,850
  -6,149
  -6,444
  -6,738
  -7,031
  -7,327
  -7,626
  -7,932
  -8,245
  -8,569
  -8,905
  -9,254
  -9,619
  -10,001
  -10,403
  -10,825
Cash from investing activities, $m
  -1,495
  -1,838
  -2,217
  -2,629
  -3,070
  -3,537
  -4,025
  -4,530
  -5,050
  -5,583
  -6,125
  -6,676
  -7,235
  -7,803
  -8,379
  -8,965
  -9,562
  -10,171
  -10,795
  -11,435
  -12,094
  -12,773
  -13,475
  -14,203
  -14,959
  -15,745
  -16,564
  -17,417
  -18,309
  -19,241
Free cash flow, $m
  -1,009
  -1,232
  -1,470
  -1,719
  -1,973
  -2,230
  -2,484
  -2,733
  -2,974
  -3,203
  -3,427
  -3,632
  -3,825
  -4,005
  -4,174
  -4,333
  -4,483
  -4,626
  -4,764
  -4,898
  -5,031
  -5,163
  -5,297
  -5,434
  -5,576
  -5,725
  -5,880
  -6,045
  -6,219
  -6,405
Issuance/(repayment) of debt, $m
  990
  1,197
  1,426
  1,668
  1,921
  2,181
  2,444
  2,707
  2,969
  3,227
  3,480
  3,727
  3,968
  4,204
  4,434
  4,661
  4,885
  5,108
  5,330
  5,554
  5,781
  6,013
  6,250
  6,496
  6,750
  7,015
  7,292
  7,582
  7,886
  8,206
Issuance/(repurchase) of shares, $m
  527
  642
  763
  887
  1,012
  1,136
  1,256
  1,370
  1,476
  1,574
  1,646
  1,725
  1,794
  1,853
  1,904
  1,947
  1,982
  2,011
  2,035
  2,055
  2,071
  2,085
  2,098
  2,109
  2,121
  2,134
  2,148
  2,164
  2,183
  2,204
Cash from financing (excl. dividends), $m  
  1,517
  1,839
  2,189
  2,555
  2,933
  3,317
  3,700
  4,077
  4,445
  4,801
  5,126
  5,452
  5,762
  6,057
  6,338
  6,608
  6,867
  7,119
  7,365
  7,609
  7,852
  8,098
  8,348
  8,605
  8,871
  9,149
  9,440
  9,746
  10,069
  10,410
Total cash flow (excl. dividends), $m
  508
  607
  718
  837
  960
  1,087
  1,215
  1,344
  1,471
  1,597
  1,698
  1,819
  1,937
  2,052
  2,165
  2,275
  2,385
  2,493
  2,602
  2,711
  2,822
  2,935
  3,051
  3,171
  3,295
  3,424
  3,559
  3,701
  3,849
  4,005
Retained Cash Flow (-), $m
  -704
  -856
  -1,020
  -1,193
  -1,374
  -1,560
  -1,748
  -1,936
  -2,123
  -2,308
  -2,489
  -2,666
  -2,838
  -3,007
  -3,172
  -3,334
  -3,494
  -3,653
  -3,812
  -3,973
  -4,135
  -4,301
  -4,471
  -4,646
  -4,828
  -5,018
  -5,215
  -5,423
  -5,640
  -5,869
Prev. year cash balance distribution, $m
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Cash flow adjustment, $m
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Cash available for distribution, $m
  -197
  -250
  -302
  -357
  -414
  -473
  -533
  -593
  -652
  -711
  -790
  -847
  -901
  -955
  -1,007
  -1,059
  -1,110
  -1,160
  -1,211
  -1,262
  -1,313
  -1,366
  -1,420
  -1,476
  -1,533
  -1,593
  -1,656
  -1,722
  -1,791
  -1,864
Discount rate, %
  6.10
  6.41
  6.73
  7.06
  7.41
  7.79
  8.17
  8.58
  9.01
  9.46
  9.94
  10.43
  10.95
  11.50
  12.08
  12.68
  13.32
  13.98
  14.68
  15.41
  16.19
  16.99
  17.84
  18.74
  19.67
  20.66
  21.69
  22.77
  23.91
  25.11
PV of cash for distribution, $m
  -186
  -220
  -248
  -271
  -290
  -302
  -307
  -307
  -300
  -288
  -279
  -257
  -233
  -208
  -182
  -157
  -133
  -110
  -90
  -72
  -56
  -43
  -33
  -24
  -17
  -12
  -8
  -6
  -4
  -2
Current shareholders' claim on cash, %
  88.9
  79.8
  72.3
  66.0
  60.7
  56.3
  52.5
  49.3
  46.5
  44.1
  42.0
  40.2
  38.6
  37.2
  35.9
  34.8
  33.8
  33.0
  32.2
  31.4
  30.8
  30.2
  29.6
  29.1
  28.7
  28.2
  27.9
  27.5
  27.1
  26.8

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.

FINANCIAL RATIOS  of  Allete, Inc. (ALE)

Valuation Ratios
P/E Ratio 26.3
Price to Sales 3
Price to Book 2.2
Price to Tangible Book
Price to Cash Flow 12.3
Price to Free Cash Flow 61.8
Growth Rates
Sales Growth Rate -9.8%
Sales - 3 Yr. Growth Rate %
EPS Growth Rate %
EPS - 3 Yr. Growth Rate %
Capital Spending Gr. Rate -7.3%
Cap. Spend. - 3 Yr. Gr. Rate -4.2%
Financial Strength
Quick Ratio 0
Current Ratio 0.1
LT Debt to Equity 72.4%
Total Debt to Equity 82.3%
Interest Coverage 4
Management Effectiveness
Return On Assets 4.4%
Ret/ On Assets - 3 Yr. Avg. 4.2%
Return On Total Capital 4.5%
Ret/ On T. Cap. - 3 Yr. Avg. 4.5%
Return On Equity 8.3%
Return On Equity - 3 Yr. Avg. 8.3%
Asset Turnover 0.3
Profitability Ratios
Gross Margin 0%
Gross Margin - 3 Yr. Avg. 0%
EBITDA Margin 33.2%
EBITDA Margin - 3 Yr. Avg. 30.3%
Operating Margin 16.7%
Oper. Margin - 3 Yr. Avg. 15.8%
Pre-Tax Margin 13.1%
Pre-Tax Margin - 3 Yr. Avg. 12.9%
Net Profit Margin 11.6%
Net Profit Margin - 3 Yr. Avg. 10.7%
Effective Tax Rate 11.4%
Eff/ Tax Rate - 3 Yr. Avg. 16.2%
Payout Ratio 66.5%

ALE stock valuation input parameters

Revenue. Company's revenue (or sales) is always the starting point of any cash flow forecast. In the ALE stock intrinsic value calculation we used $1499 million for the last fiscal year's total revenue generated by Allete, Inc.. The default revenue input number comes from 0001 income statement of Allete, Inc.. You may change it if you feel that it should be adjusted for some unusual circumstances that are not expected to be repeated in the future or if you already know (from interim financial statements, for example) that this year's revenue is going to be quite different.

Revenue growth rate. Forecasted future revenue growth rate is the most important input parameter for the intrinsic value calculation. Unlike other input parameters that are reasonably expected to be in line with their historic averages or their historic trends, the revenue growth rate by and large is a wild card: nobody really knows what the company's revenue will be in the future. Of course, the level of unpredictability is different for different industries (utility companies being the most predictable and, thus, less risky).
    We use three input parameters to forecast the revenue growth rate in our ALE stock valuation model: a) initial revenue growth rate of 32.7% whose default value is the revenue growth rate in the most recent quarter compared to the quarterly revenue a year ago; b) terminal revenue growth rate of 5% whose default value is chosen to be close to the average nominal (i.e. not adjusted for inflation) GDP growth rate; and c) revenue decline factor of 0.9, which stipulates that revenue growth rate in each forecasted year will be equal to the difference of the revenue growth rate in the preceding year and the terminal revenue growth rate multiplied by this revenue decline factor (with the passage of time the revenue growth rate will be approaching the terminal revenue growth rate, but not quite reaching it - though the difference could be infinitesimally small).
    At the revenue decline factor of 1, the future revenue growth rate is forecasted to be constant and equal to the initial revenue growth rate. The smaller the revenue decline factor, the faster the revenue growth rate will approach the terminal revenue growth.

Discount rate. The discount rate is used for determining the present value of future cash flows: future cash flows are "discounted" as at normal conditions (that translate into positive expected return on investment) one dollar today is worth more than the same dollar in the future. Unlike all other valuation models, we use variable discount rate, i.e. it increases for each consecutive year. This is done to account for higher risk of cash flows coming in further in the future.
    The initial discount rate of 6.1%, whose default value for ALE is calculated based on our internal credit rating of Allete, Inc., is applied to the cash flow expected to be received a year from now (well, actually, to be precise, in the financial year following the base year - the last year for which we have financial statements). For each consecutive year the discount rate is multiplied by the discount rate multiplier of 1.05, e.i. each year it increases by 5%. Feel free to change this number to correspond to your level of risk assessment of Allete, Inc..
    By the way, it is easy to set the discount rate to be constant (this would make comparison with other valuation models easier): just set the discount rate multiplier equal to 1 and chose the magnitude of the initial discount rate to your liking.

Variable cost ratio is the ratio of variable costs (i.e. costs that fluctuate with fluctuation of the volume of production) to the revenue expressed as a percentage. In the calculation of intrinsic value of ALE stock the variable cost ratio is equal to 84.1%.

Fixed operating expenses is just that - expenses that are not dependant on the volume of production. They are set to $0 million in the base year in the intrinsic value calculation for ALE stock. These expenses increase with the level of inflation in subsequent years.

Interest rate on debt is the average all-in rate of interest paid by the company on its debt. It is set at 5.4% for Allete, Inc..

Corporate tax rate of 27% is the nominal tax rate for Allete, Inc.. In reality, companies find ways to pay much less taxes than that or not to pay them at all.

Cash flow adjustment could be used for any adjustment the investor deems necessary. Most commonly we use this field to account for stock options-related effects in excess of what is reported on the company's income statement. The cash flow adjustment is expressed as a percentage of the revenue, and in the current valuation of the ALE stock is equal to 0%.

Production assets are the company's assets used for manufacturing products or provision of services. In the valuation model input table they are expressed as a percentage of revenue and for ALE are equal to 265.2%.

Life of production assets of 20.4 years is the average useful life of capital assets used in Allete, Inc. operations. It is used to calculate yearly capital expenditures needed to keep these assets in good order - we call it the maintenance CAPEX.

Working capital is the difference between the company's current assets and liabilities. In the model we use the ratio of working capital to revenue, which for ALE is equal to -5.5%. A negative number means that the company is apt at using financial resources of its suppliers and customers; a large positive number, on the other hand, means that it either provides in-kind financing to others or is not good at managing its inventories.

Book value of equity - $2155.8 million for Allete, Inc. - is used in calculation of the "floor" for intrinsic valuation based on the discounted cash flow (DCF) method. Even if the prospects are very bad for a company, its assets could always be sold now for their current fair market value.

Shares outstanding of 51.540 million for Allete, Inc. is needed to calculate the intrinsic value of one share.

Market capitalization is used here only for reference purposes and as a quick check that the share price and the number of shares outstanding numbers are correct - something especially to be cognizant about at stock splits. So, the market capitalization of Allete, Inc. at the current share price and the inputted number of shares is $4.2 billion.

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