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

Zacks Equity Research

Earnings estimates for ALLETE, Inc. ALE 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, FirstEnergy Corporation FE and Black Hills Corporation BKH, 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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PNM Resources, Inc. (Holding Co.) (PNM) : Free Stock Analysis Report
 
Black Hills Corporation (BKH) : Free Stock Analysis Report
 
FirstEnergy Corporation (FE) : Free Stock Analysis Report
 
Allete, Inc. (ALE) : Free Stock Analysis Report
 
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