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ALLETE Inc versus Pinnacle West Capital Corporation Head to Head Compare


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This is a head to head compare of ALLETE Inc (NYSE:ALE) and Pinnacle West Capital Corporation (NYSE:PNW) . We will compare the two companies on revenue growth, earnings, revenue per employee, operating margins, free cash flow and valuation. The head to head compare assigns 100 points in total.



Before we dive into the analysis, we will look at the stock returns for each company over the last three months, six months and the last year. The stock returns do not impact the head to head compare scores which are focused on the fundamentals of each company, but ultimately stock returns are are still a critical piece to a full analysis and compare.


Stock Returns
Symbol 3-Months 6-Months One-Year Fundamentals
ALE +11.4% +17.3% +28.4%
PNW +11.3% +15.7% +20.6%

Pinnacle West Capital Corporation has a higher fundamental rating then ALLETE Inc which has an impact on the head-to-head comparison. The CML Star Rating is an objective, quantifiable measure of a company's operating and financial condition. The rating is computed by measuring numerous elements of the company's current financial data and their associated changes over time.

Now, let's dive into the two companies to compare them.

➤ Income Statement
First we turn to the income statement and compare revenue, earnings and revenue per employee for both companies. We note that simple revenue comparisons do not impact the rating.

Pinnacle West Capital Corporation has substantially higher revenue in the last year than ALLETE Inc. Raw revenue comps do not affect the head to head rating.
Revenue

Both ALE and PNW show positive earnings over the last year with the edge to PNW.

Net Income


PNW generates massively larger revenue per employee ($37.6 million) than ALE ($691,000).

Revenue per Employee
($ Millions)


➤ Margins
Next we create some derived metrics to compare the the amount of revenue earned per dollar of expense and the amount of free cash flow earned per dollar of revenue. Margins are one of the fairest ways to compare companies since they remove some of the bias of large versus small numbers.

Pinnacle West Capital Corporation generates $1.63 in revenue for every $1 of expense, substantially higher than ALLETE Inc's $1.17.

Revenue per Dollar of Expense


Both ALE and PNW generate cash flow losses, and the margins are very similar.

Free Cash Flow
per Dollar of Revenue


➤ Growth
Finally we compare the financial metrics related to growth: revenue growth rates and price to sales.

While Pinnacle West Capital Corporation is growing revenue, ALLETE Inc revenue is actually shrinking.

Revenue Growth


For every $1 in revenue, the stock market prices in $2.51 in market cap for ALE and $2.54 in market cap for PNW.

Price to Sales

Pinnacle West Capital Corporation (NYSE:PNW)
defeats
ALLETE Inc (NYSE:ALE) : 65 to 35