ALLETE Board of Directors raises quarterly common stock dividend

Rhea-AI Summary

ALLETE, Inc. (NYSE:ALE) has announced a 4.1% increase in its quarterly dividend on common stock to $0.705 per share, reflecting the company's confidence in its growth outlook. This marks over 74 consecutive years of dividends paid, with the increased dividend equivalent to $2.82 per share annually. The regular quarterly dividend is payable Mar. 1 to common shareholders of record at the close of business Feb. 15, 2024.

Positive

• 4.1% increase in quarterly dividend
• Over 74 consecutive years of dividends paid
• Confidence in growth outlook

Negative

• None.

Insights

Financial Analyst

The announcement by ALLETE, Inc. of a dividend increase of 4.1% signifies a positive signal to the market, indicating the company's financial health and confidence in future earnings. From a financial perspective, this move can attract income-focused investors and potentially boost the stock price as it portrays a stable and shareholder-friendly company. It is essential to consider the dividend yield in comparison to the industry average, as a significantly higher yield could indicate that the market perceives higher risk with the company, or a yield well below industry standards could imply undervaluation.

Investors should also examine the payout ratio to assess whether the dividends are being covered by earnings, as an unsustainable payout could lead to future dividend cuts. The historical context of over 74 consecutive years of dividends suggests a long-term commitment to returning value to shareholders, which might appeal to conservative investors seeking reliable income streams.

Market Research Analyst

ALLETE's dividend increase is a reflection of its strategic position within the energy sector, particularly with its diversified portfolio that includes clean energy and utility businesses. A diversified energy portfolio can provide resilience against market volatility and regulatory changes. The company's investment in clean energy also aligns with growing trends towards sustainable and renewable energy sources, which could lead to favorable market positioning in the long run.

However, investors should consider the capital expenditure requirements of the energy sector, especially in transitioning towards more sustainable sources. These investments could impact future cash flows and the ability to maintain or increase dividends. The company's equity interest in the American Transmission Co. also suggests exposure to infrastructure development, which can be capital intensive but essential for long-term growth in the energy sector.

Economist

The increase in ALLETE's dividend comes amidst a broader economic context where interest rates and inflation rates are pivotal. In a higher interest rate environment, dividends might be less attractive compared to fixed-income alternatives, but in a low-rate environment, they can offer a competitive return. Additionally, in times of inflation, companies that can pass on costs to consumers and maintain margins may fare better and their dividends could serve as a hedge against inflation.

ALLETE's performance should be monitored in relation to economic cycles, as the energy sector can be sensitive to industrial and commercial demand. The company's growth outlook, as mentioned by the CEO, should be critically evaluated against macroeconomic indicators and sector-specific challenges, such as energy prices and regulatory changes, to gauge the sustainability of its dividend policy in various economic scenarios.

DULUTH, Minn.--(BUSINESS WIRE)-- ALLETE, Inc. (NYSE:ALE) today announced that its Board of Directors has increased the quarterly dividend on the company’s common stock to $0.705 per share, a 4.1% percent increase.

“This dividend increase reflects the ALLETE Board of Directors’ confidence in our growth outlook for ALLETE,” said ALLETE Chair, President and CEO Bethany Owen. “We are pleased to deliver another dividend increase to our shareholders – adding to our track record of more than 74 consecutive years of dividends paid.”

On an annual basis the increased dividend is equivalent to $2.82 per share. The regular quarterly dividend is payable Mar. 1 to common shareholders of record at the close of business Feb. 15, 2024.

ALLETE Inc. is an energy company headquartered in Duluth, Minnesota. In addition to its electric utilities, Minnesota Power and Superior Water, Light and Power of Wisconsin, ALLETE owns ALLETE Clean Energy, based in Duluth; BNI Energy, based in Bismarck, N.D.; New Energy Equity headquartered in Annapolis, MD, and has an eight percent equity interest in the American Transmission Co. More information about ALLETE is available at www.allete.com. ALE-CORP

The statements contained in this release and statements that ALLETE may make orally in connection with this release that are not historical facts, are forward-looking statements. These forward-looking statements involve risks and uncertainties and investors are directed to the risks discussed in documents filed by ALLETE with the Securities and Exchange Commission.

View source version on businesswire.com: https://www.businesswire.com/news/home/20240126990017/en/

Vince Meyer

218-723-3952

vmeyer@allete.com

Source: ALLETE, Inc.

FAQ

What is the quarterly dividend increase announced by ALLETE, Inc. (NYSE:ALE)?

ALLETE, Inc. (NYSE:ALE) announced a 4.1% increase in its quarterly dividend on common stock to $0.705 per share.

When is the regular quarterly dividend payable to common shareholders?

The regular quarterly dividend is payable Mar. 1 to common shareholders of record at the close of business Feb. 15, 2024.

How many consecutive years has ALLETE, Inc. (NYSE:ALE) paid dividends?

ALLETE, Inc. (NYSE:ALE) has a track record of over 74 consecutive years of dividends paid.

What is the annual equivalent of the increased dividend per share?

The increased dividend is equivalent to $2.82 per share annually.

Where is ALLETE, Inc. (NYSE:ALE) headquartered?

ALLETE, Inc. (NYSE:ALE) is an energy company headquartered in Duluth, Minnesota.