Diversified utility ALLETE Inc. (ALE - Free Report) announced that its board of directors has approved an increase in the quarterly dividend rate by 1.5 cents. The revised quarterly dividend will be 47.5 cents payable on Mar 1, 2013, to shareholders of record at the close of business on Feb 15, 2013.
The annualized dividend rate of the company will come to $1.90, up 3.3% from the prior rate of $1.84. The current annualized dividend yield of the company is 4.3%. The increase in the distributable income speaks of the company’s successfully executed investment growth strategy.
ALLETE Inc. is working consistently to develop its infrastructure and to provide better services to its customers. The initiatives taken by ALLETE are yielding positive results, enabling the company to share more with shareholders. The previous hike in the quarterly dividend rate was on Jan 12, when the rate was raised to 46 cents from 44.5 cents.
Cash flow from operating activities at the end of the first nine months of 2012 was $195.5 million versus $185.1 million in the comparable period last year. During the first nine months the company utilized $52.2 million for dividend payouts.
The long-term objective of the company is to ensure earnings growth of 5% per year (2010 being the base year) and to maintain a competitive dividend payout. We believe the initiatives taken by ALLETE to develop the transmission system and generate power from renewable sources will provide adequate returns enabling the company to fulfill its objectives.
The shareholders too reacted positively to the news. The shares gained 1.02% ending at $44.51 per share at the end of Jan 23.
ALLETE Inc. currently has a short-term a Zacks Rank #3 (Hold). Besides ALLETE, a few other utility operators have also raised their quarterly dividend rates in recent months. While ONEOK Inc. (OKE - Free Report) increased its quarterly dividend by 9%, Dominion Resources Inc. (D - Free Report) and OGE Energy Corporation (OGE - Free Report) raised it by 6.6% and 6.37%, respectively.
Minnesota-based ALLETE, Inc. is a diversified utility having operations in Florida, North Dakota and Wisconsin. The company was founded in 1906. With a market capitalization of $1.68 billion, the company has 1,315 full-time employees.