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Here's Why You Should Add ALLETE (ALE) to Your Portfolio

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Earnings estimates for ALLETE, Inc. (ALE - Free Report) have been revised upward in the past 30 days, reflecting analysts’ optimism on the stock. The Zacks Consensus Estimate for 2019 and 2020 earnings has inched up 0.6% and 0.8%, respectively.

Let’s focus on the factors that make the stock an appropriate pick at the moment.

Zacks Rank & Earnings EstimateRevision

The stock currently carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Earnings estimates for ALLETE for 2019 and 2020 rose 0.55% and 7.16% on a year-over-year basis to $3.63 and $3.89 per share, respectively.

Long-Term Growth & Dividend Yield

The company’s long-term (3 to 5 years) earnings growth is pegged at 7.20%.

Currently, the company has a dividend yield of 2.78% compared with the Zacks S&P 500 composite’s 1.96%.

Debt-to-Capital Ratio

The debt-to-capital ratio is a good indicator of the financial position of a company. The indicator shows how much debt is used to conduct the business. Currently, ALLETE has a debt-to-capital ratio of 40.95% compared with the industry’s 50.12% and Zacks S&P 500 composite’s 43.02%

Long-Term Price Performance

On a long-term basis, the company has outperformed the industry. In the past 5 years, ALLETE’s shares have rallied 75.7% compared with the industry’s rise of 17.6%.

Long-Term Plans

The company plans to invest $1,815 million from 2019 to 2023. The company expects to achieve 5-7% earnings growth in the said period.

Other Key Picks

Some other top-ranked stocks from the same industry are PNM Resources, Inc (PNM - Free Report) , FirstEnergy Corporation (FE - Free Report) and Black Hills Corporation (BKH - Free Report) , each holding a Zacks Rank of 2.

PNM Resources pulled off an average positive earnings surprise of 15.75% in the last four quarters. The company’s long-term earnings growth is pegged at 5.20%.

FirstEnergy pulled off an average positive earnings surprise of 5.09% in the last four quarters. The company’s long-term earnings growth is pegged at 6%.

Black Hills delivered an average positive earnings surprise of 5.69% in the last four quarters. The company’s long-term earnings growth is pegged at 4.80%

 

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