Dividends4Life: Is ALLETE, Inc. (NYSE:ALE) A Smart Pick For Income Investors?

Could ALLETE, Inc. (NYSE:ALE) be an attractive dividend share to own for the long haul? Investors are often drawn to a company for its dividend. Yet sometimes, investors buy a stock for its dividend and lose money because the share price falls by more than they earned in dividend payments. A 2.9% yield is nothing to get excited about, but investors probably think the long payment history suggests ALLETE has some staying power. When buying stocks for their dividends, you should always run through the checks below, to see if the dividend looks sustainable.

Dividend investors should always want to know if a) a company’s dividends are affordable, b) if there is a track record of consistent payments, and c) if the dividend is capable of growing. ALLETE gets a pass on its dividend payout ratio, but it paid out virtually all of its cash flow as dividends. This may just be a one-off, but we’d keep an eye on this. Second, earnings growth has been mediocre, but at least the dividends have been relatively stable. While we’re not hugely bearish on it, overall we think there are potentially better dividend stocks than ALLETE out there.

Source: Simply Wall St.

Related Articles:
- Dividend Stocks vs. a Safe Distribution Rate
- 5 Select High-Yield S&P 500 Dividend Stocks
- A Winning Investment Strategy
- 5 Dividend Stocks With A 20% Yield In 20 Years
- 4 Industrial Strength Dividend Growth Stocks With Yields In Excess Of 2.7%

Click here to have future posts delivered to you for free!

________________________________________________________________

0 comments

Post a Comment

~

Popular Posts Last 30 Days