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Last update on 2024-06-07

Alliant Energy (LNT) - Piotroski F-Score Analysis for Year 2023 (Final Score: 5/9)

Analyze Alliant Energy (LNT)'s 2023 Piotroski F-Score, evaluating financial strength using profitability, liquidity, and operational efficiency criteria.

Knowledge hint:
The Piotroski F-Score is a number between 0 to 9 which reflects the strength of a company's financial position. It is based on 9 criteria involving profitability, liquidity, and leverage. This model helps investors identify stocks that are strong, undervalued investments.
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Short Analysis - Piotroski Score: 5

We're running Alliant Energy (LNT) against the Piotroski 9-criteria scoring system to assess profitability, liquidity, and operating efficiency:

Criteria
Company has a positive net income?
1
Company has a positive cash flow?
1
Return on Assets (ROA) are growing?
0
Operating Cashflow are higher than Netincome?
1
Leverage is declining?
0
Current Ratio is growing?
1
Number of shares not diluted?
0
Cross Margin is growing?
1
Asset Turnover Ratio is growing?
0

The Piotroski F-Score measures a company's financial strength based on profitability, liquidity, and efficiency. Alliant Energy (LNT) has a Piotroski F-Score of 5 out of 9. Here's the snapshot: 1. Profitability: - Positive net income ($703M in 2023) - 1 point - Positive cash flow from operations ($867M in 2023) - 1 point - Decreasing Return on Assets (ROA) - 0 points - Operating cash flow higher than net income - 1 point 2. Liquidity: - Increased leverage ratio (higher debt reliance) - 0 points - Improved current ratio, but still lower than industry median - 1 point - Increased number of shares outstanding (dilution) - 0 points 3. Operating efficiency: - Better gross margin (43% in 2023) - 1 point - Decreasing asset turnover ratio - 0 points Overall, the company shows mixed financial health with positive trends in some areas and issues in others.

Insights for Value Investors Seeking Stable Income

With a Piotroski F-Score of 5 out of 9, Alliant Energy (LNT) presents a mixed bag of strengths and concerns. They have shown strong profitability and positive cash flow, indicating solid operational health. However, declining ROA, increased leverage, and share dilution raise some red flags about efficiency and financial risk. For investors, while Alliant Energy demonstrates some promising financial indicators, the concerns related to efficiency and rising debt can't be ignored. It may be worth keeping an eye on this stock, but potential investors should closely monitor future performance and weigh these mixed signals in light of their investment strategy.

For those who are interested in delving deeper into the specifics, the subsequent section provides a comprehensive exploration of the criteria.

Profitability of Alliant Energy (LNT)

Company has a positive net income?

Netincome refers to the company's total earnings or profit. It is essential as it indicates the company's capability to generate profit from its operations, which is crucial for sustainability and growth.

Historical Net Income of Alliant Energy (LNT)

For the year 2023, Alliant Energy (LNT) reported a positive net income of $703 million. This positive trend is a strong indicator of the company's solid financial health and operational efficiency. Over the past two decades, Alliant Energy has shown a consistently upward trend in net income, with only minor setbacks, such as a slight negative figure in 2005. The increasing net income year over year supports a robust financial position and endorses the company's strategic and operational competence. Therefore, for the Piotroski Analysis, this criterion adds 1 point.

Company has a positive cash flow?

Cash Flow from Operations (CFO) reflects the company's ability to generate cash from its core business activities. This is crucial as it indicates financial health and operational efficiency.

Historical Operating Cash Flow of Alliant Energy (LNT)

Alliant Energy's Cash Flow from Operations (CFO) for 2023 is $867 million, which is positive. This consistent ability to generate cash from its operations over the past 20 years, peaking at $984.9 million in 2010, suggests financial robustness. Comparing over two decades, the 2023 figure is one of the highest, surpassed by only four other years since 2003. A positive CFO in 2023 secures Alliant Energy an additional point in this criterion, indicating sound operational performance.

Return on Assets (ROA) are growing?

ROA, or Return on Assets, measures how effectively a company uses its assets to generate profit. An increasing ROA signifies better efficiency and profitability, which is crucial for assessing management's effectiveness.

Historical change in Return on Assets (ROA) of Alliant Energy (LNT)

For Alliant Energy (LNT), the ROA in 2023 is 0.034 compared to 0.0354 in 2022. This denotes a decrease in the company's asset utilization efficiency. Adding to this, while Alliant's ROA is decreasing, the industry median showcases a notably higher and fairly stable ROA, and over the years predominantly hovering around 0.4, with slight fluctuations. This stark contrast suggests more room for efficiency improvement at Alliant Energy. Thus, for the Piotroski F-Score, this criterion would result in 0 points, indicating a negative trend.

Operating Cashflow are higher than Netincome?

This criterion evaluates if a company generates more cash from its operations than reported net income. It indicates strong cash-generating abilities.

Historical accruals of Alliant Energy (LNT)

For the year 2023, Alliant Energy's operating cash flow stands at $867 million, while its net income is $703 million. This results in a difference of $164 million, demonstrating that the company indeed generates more cash from operations than its net income. This is a positive indicator, particularly when examining the historical data: in the last 20 years, the operating cash flow has generally been higher than the net income, which implies strong cash-generating capabilities. Thus, 1 point is added for this criterion in the Piotroski Score, reflecting a favorable trend. Historical patterns also show consistent cash flows; for instance, the company recorded an operating cash flow of $984.9 million in 2010 compared to a net income of $306.3 million, underscoring the presence of robust cash-generating operations over several years.

Liquidity of Alliant Energy (LNT)

Leverage is declining?

Change in Leverage examines how the ratio of a company's debt relative to its equity has evolved. It's essential as it reflects the firm's financial structure and risk profile.

Historical leverage of Alliant Energy (LNT)

In 2022, Alliant Energy (LNT) had a leverage ratio of 0.3803, increasing to 0.3873 in 2023. Given this rise, Alliant Energy does not gain a point in this criterion. Analyzing historical data from the past 20 years, their leverage ratio has shown volatility, fluctuating from a low of 0.1868 in 2006 to recent highs closer to 0.3822 in 2020. This consistent upward trend might raise concerns regarding the company's increasing reliance on debt. Having increased their leverage again in 2023, it suggests a growing propensity towards debt usage, which may heighten their financial risk exposure.

Current Ratio is growing?

Current Ratio measures a company's ability to pay short-term obligations with short-term assets. It is important because a higher ratio indicates better liquidity, important for maintaining solvency.

Historical Current Ratio of Alliant Energy (LNT)

Alliant Energy's current ratio increased from 0.529 in 2022 to 0.5521 in 2023, signaling a minor improvement in liquidity. Historically, however, the company's current ratio has been on a decline from over 1.0 in the early 2000s to below the industry median of 0.7878 in 2023. Despite this relative uptrend, it remains less than ideal, indicating relatively weaker liquidity compared to the industry. Therefore, Alliant Energy scores 1 point in this criterion for 2023 due to the year-over-year improvement, but the trend should be closely monitored.

Number of shares not diluted?

Change in shares outstanding signifies whether the company has issued new shares in the market or repurchased its shares, affecting ownership distribution.

Historical outstanding shares of Alliant Energy (LNT)

The outstanding shares for Alliant Energy (LNT) increased from 250,900,000 in 2022 to 253,000,000 in 2023. Therefore, this criterion is assigned a value of 0 since the number of outstanding shares did not decrease. Historically, the last 20 years show an increasing trend in outstanding shares, except for slight fluctuations, suggesting periodic issuance likely for capital raising or stock compensation purposes, which could dilute shareholder value.

Operating of Alliant Energy (LNT)

Cross Margin is growing?

Gross Margin measures the percentage of revenue that exceeds the cost of goods sold (COGS), indicating a company's financial health and efficiency.

Historical gross margin of Alliant Energy (LNT)

Alliant Energy's Gross Margin improved from 0.4064 in 2022 to 0.4306 in 2023. Adding 1 point for this criterion is justified, indicating a positive trend. However, comparing this with the industry's median, which stood at 0.4109 in 2023, Alliant Energy not only outperformed its 2022 level but also surpassed the industry norm. Despite fluctuations over the last two decades, the recent improvement is a notable positive signal in the financial performance.

Asset Turnover Ratio is growing?

The criterion assesses the efficiency with which a company uses its assets to generate sales, an increasing Asset Turnover suggests improved efficiency.

Historical asset turnover ratio of Alliant Energy (LNT)

In 2023, Alliant Energy (LNT) recorded an Asset Turnover of 0.1945, which is a decrease from the 0.2172 observed in 2022. This decline in Asset Turnover from the previous year indicates a reduction in the efficiency with which the company is utilizing its assets to generate revenue. Consequently, for this criterion, a score of 0 is assigned. Evaluating the 20-year historical data, Alliant Energy's Asset Turnover shows a general declining trend from 0.4234 in 2003, peaking at 0.4817 in 2007, and steadily decreasing to its current level. This persistent decline underscores potential operational efficiency challenges the company has faced over the years.


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