Reasons to Add Alliant Energy (LNT) to Your Portfolio Now
Alliant Energy’s LNT investment in regulated natural gas and renewable energy assets and expanding customer base will further boost its bottom line. Given its growth opportunities and strong dividend history, LNT makes for a solid investment option in the utility sector.
Let’s focus on the factors that make this Zacks Rank #2 (Buy) company a strong investment pick at the moment.
Growth Projections
The Zacks Consensus Estimate for LNT’s 2023 earnings per share (“EPS”) is pegged at $2.87, indicating a year-over-year increase of 2.5%.
The same for sales is pinned at $4.32 billion, indicating a year-over-year improvement of 2.67%.
LNT’s long-term (three- to five-year) earnings growth rate is 6.26%.
Dividend History
The regulated nature of Alliant Energy's operation boosts its earnings potential, enabling the company to increase its annual dividend rate for more than a decade. LNT has paid out dividends since 1946 without fail. Currently, its quarterly dividend is 45.25 cents per share, resulting in an annualized dividend of $1.81. The company’s current dividend yield is 3.53%, better than the Zacks S&P 500 Composite's average of 1.62%. Subject to the approval of its board of directors, Alliant Energy's dividend target for 2024 is $1.92, which reflects a 6% increase from the 2023 level.
Return on Equity
Return on equity (“ROE”) indicates how efficiently a company has been utilizing its funds to generate higher returns. Currently, Alliant Energy’s ROE is 10.93%, higher than the industry’s average of 10.06%. This indicates that the company has been utilizing its funds more constructively than its peers in the electric power utility industry.
Systematic Investments
Alliant Energy plans to invest substantially over the next four years to strengthen the electric and gas distribution network and add natural gas and renewable assets to the generation portfolio. It plans to invest $9.1 billion between 2024 and 2027.
LNT is completing major construction projects on time and at or below budget. A constructive regulatory environment will enable the company to recover capital expenditures. Its strong and flexible investment plans will support an 8% base CAGR between 2024 and 2027.
Price Performance
In the past month, Alliant Energy’s shares have rallied 1.4% compared with the industry’s average growth of 3.1%.
Image Source: Zacks Investment Research
Other Stocks to Consider
A few other top-ranked stocks from the same industry are ALLETE Inc. ALE, ONE Gas OGS and NextEra Energy, Inc. NEE, each carrying a Zacks Rank #2 at present. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
ALLETE, ONE Gas and NextEra’s long-term earnings growth rates are pegged at 8.1%, 5% and 8.2%, respectively.
The Zacks Consensus Estimate for ALLETE, ONE Gas and NextEra Energy’s 2023 EPS implies year-over-year growth of 28.4%, 1.23% and 7.59%, respectively.
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NextEra Energy, Inc. (NEE) : Free Stock Analysis Report
Alliant Energy Corporation (LNT) : Free Stock Analysis Report
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