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Reasons to Add ALLETE (ALE) to Your Portfolio Right Now
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ALLETE Inc. (ALE - Free Report) is an energy company engaged in providing clean energy to its customers. Its strategic capital investment plans to strengthen its clean energy generation portfolio, improving earnings estimates and steady dividend payment makes a strong case for investment in the utility space.
The Zacks Consensus Estimate for 2022 earnings has moved by 0.5% in the past 60 days to $3.86 per share. Revenue estimates for 2022 of $1.41 billion imply year-over-year growth of 4.53%
ALLETE delivered an average earnings surprise of -5.56% in the last four quarters.
ALLETE’s long-term (three to five years) earnings growth is projected at 6%.
Dividend
ALLETE has a long history of dividend payment and has paid dividend to its shareholders every year since 1950. ALLETE aims to increase its dividend rate annually in the range of 5-7%, subject to approval of its board of directors. ALLETE has raised dividend annually for the last 10 years. ALLETE’s current annual dividend of $2.52 per share reflects an increase of 41.6% from $1.78 per share paid in 2011.
ALLETE’s long-term dividend payout ratio target is 60-70%. Currently, ALLETE has a dividend yield of 3.80% compared with the industry’s 3.09%.
Regular Investments & Emission Reduction
ALLETE plans to make planned investments of $1.62 billion within the 2021-2025 time frame. The strategic investments were directed to strengthen its existing infrastructure and boost its clean energy production plans.
ALLETE plans to implement a well-integrated resource plan to build up a modern and flexible transmission and distribution grid. ALLTEE, through its planned investment, will produce 80% of its electricity from renewable sources by 2035 and aims to become 100% carbon-free by 2050.
Debt Position
The debt to capital of ALLETE at the end of the third quarter was 41.5% compared with the industry average of 52.43%. It indicates that the company is comparatively using lower debts to manage its business compared with its peers.
Times interest earned (“TIE”) ratio of ALE at the end of third-quarter 2021 was 2.4. A greater than one TIE ratio reflects the companies’ financial strength and their ability to meet their debt obligations.
Price Performance
In the past three months, the stock has gained 5.4% compared with the industry’s 4.9% growth.
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Other Stocks to Consider
Other stocks in the Zacks Utilities sector that investors can consider include IDACORP Inc. (IDA - Free Report) , Hawaiian Electric Industries (HE - Free Report) and Portland General Electric (POR - Free Report) , each holding a Zacks Rank #2.
The long-term (three to five years) earnings growth of IDACORP Inc, Hawaiian Electric Industries and Portland General Electric is projected at 4.42%, 7.35% and 8.64%, respectively.
The price performance in the past three months of stock IDACORP Inc, Hawaiian Electric Industries and Portland General Electric has gained 6.1%, 1.9% and 6.8%.
The Zacks Consensus Estimate for 2022 earnings per share of IDACORP Inc, Hawaiian Electric Industries and Portland General Electric has moved up 2.67%, 0.45%, and 2.91%, year over year, respectively.
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Reasons to Add ALLETE (ALE) to Your Portfolio Right Now
ALLETE Inc. (ALE - Free Report) is an energy company engaged in providing clean energy to its customers. Its strategic capital investment plans to strengthen its clean energy generation portfolio, improving earnings estimates and steady dividend payment makes a strong case for investment in the utility space.
Let’s focus on the factors that make this Zacks Rank #2 (Buy) stock a strong investment pick at the moment. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Growth Projection & Surprise History
The Zacks Consensus Estimate for 2022 earnings has moved by 0.5% in the past 60 days to $3.86 per share. Revenue estimates for 2022 of $1.41 billion imply year-over-year growth of 4.53%
ALLETE delivered an average earnings surprise of -5.56% in the last four quarters.
ALLETE’s long-term (three to five years) earnings growth is projected at 6%.
Dividend
ALLETE has a long history of dividend payment and has paid dividend to its shareholders every year since 1950. ALLETE aims to increase its dividend rate annually in the range of 5-7%, subject to approval of its board of directors. ALLETE has raised dividend annually for the last 10 years. ALLETE’s current annual dividend of $2.52 per share reflects an increase of 41.6% from $1.78 per share paid in 2011.
ALLETE’s long-term dividend payout ratio target is 60-70%. Currently, ALLETE has a dividend yield of 3.80% compared with the industry’s 3.09%.
Regular Investments & Emission Reduction
ALLETE plans to make planned investments of $1.62 billion within the 2021-2025 time frame. The strategic investments were directed to strengthen its existing infrastructure and boost its clean energy production plans.
ALLETE plans to implement a well-integrated resource plan to build up a modern and flexible transmission and distribution grid. ALLTEE, through its planned investment, will produce 80% of its electricity from renewable sources by 2035 and aims to become 100% carbon-free by 2050.
Debt Position
The debt to capital of ALLETE at the end of the third quarter was 41.5% compared with the industry average of 52.43%. It indicates that the company is comparatively using lower debts to manage its business compared with its peers.
Times interest earned (“TIE”) ratio of ALE at the end of third-quarter 2021 was 2.4. A greater than one TIE ratio reflects the companies’ financial strength and their ability to meet their debt obligations.
Price Performance
In the past three months, the stock has gained 5.4% compared with the industry’s 4.9% growth.
Other Stocks to Consider
Other stocks in the Zacks Utilities sector that investors can consider include IDACORP Inc. (IDA - Free Report) , Hawaiian Electric Industries (HE - Free Report) and Portland General Electric (POR - Free Report) , each holding a Zacks Rank #2.
The long-term (three to five years) earnings growth of IDACORP Inc, Hawaiian Electric Industries and Portland General Electric is projected at 4.42%, 7.35% and 8.64%, respectively.
The price performance in the past three months of stock IDACORP Inc, Hawaiian Electric Industries and Portland General Electric has gained 6.1%, 1.9% and 6.8%.
The Zacks Consensus Estimate for 2022 earnings per share of IDACORP Inc, Hawaiian Electric Industries and Portland General Electric has moved up 2.67%, 0.45%, and 2.91%, year over year, respectively.