Allete Hits 52-Week High On Returns From Steady Investment

Share price of Allete, Inc. (NYSE:ALE) hit a new 52-week high of $73.52, eventually closing a tad lower at $73.15 on May 26. The stock has delivered a one-year return of about 31.5% compared with the Zacks categorized Utility - Electric Power industry’s gain of 6.6%.

In the last 52 weeks, Allete‘s share price has ranged from a low of $56.48 to a high of $73.52. Average volume of shares traded in the last three months is approximately 234.4 thousand.

Factors behind the Performance

Allete‘s shares have been on the rise following strong first-quarter 2017 results that were declared on May 5. The company posted earnings per share of 97 cents, beating the Zacks Consensus Estimate of 95 cents by 2.1%. Reported earnings were up by 4.3% year over year.

The company has been a consistent performer, having delivered positive earnings surprises in three out of the trailing four quarters with average surprise of 6.3%. The long-term earnings growth of the company is presently pegged at 6.10%.

Allete will benefit from two announced wind projects – a project expansion of up to 50 megawatts for Montana-Dakota Utilities Co. and a new 100 megawatt wind energy facility to be built and operated to service a long-term PPA with Xcel Energy Inc. (NYSE:XEL) These projects are likely to drive earnings growth in the near future.

The company's investment in the American Transmission Co. (ATC) projects $3.6–$4.4 billion investment through 2024.

The Great Northern Transmission Line Initiative that is anticipated to be complete by 2020 will enhance regional reliability and promote a greater exchange of sustainable energy.

The company’s total capital expenditure from Regulated Utility Operations, Regulated Utility Capital Expenditures and others in between 2017 to 2021 is expected to be around $1,415 million. With significant and growing portfolio of renewable assets, the company is well positioned to fund future growth initiatives.

Allete, Inc. Price and Consensus

Stocks to Consider

Allete currently carries a Zacks Rank #3 (Hold). Investors can consider better-ranked stocks from the same industry like Algonquin Power & Utilities Corp. (TO:AQN) and Avangrid, Inc. (NYSE:AGR) . Both these stocks carry a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Algonquin Power & Utilities reported a positive earnings surprise of 11.76% in first-quarter 2017. Its current quarter 2017 estimates have risen by 25% to 10 cents per share in the last 30 days.

Avangrid reported a positive earnings surprise of 7.35% in first-quarter 2017. Its 2017 estimates have risen by 0.5% to $2.21 per share in the last 60 days.

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