Updated 3/5/25
Alliant Energy Corporation (NASDAQ: LNT) is a utility company that provides electricity and natural gas to customers across Iowa and Wisconsin. Utilities are known for their steady cash flow, making them a go-to option for dividend investors seeking consistent income.
Alliant has built a strong reputation for delivering stable returns and gradually increasing its dividend over time. For those who prioritize a mix of income and reliability, this stock has plenty to offer. But does it make sense to invest in it now? Let’s take a closer look at its dividend strength, financial health, and potential risks.
🔑 Key Dividend Metrics
💰 Dividend Yield: 3.16%
📈 5-Year Average Yield: 3.12%
📆 Dividend Growth Streak: Over 21 years
📊 Payout Ratio: 71.38%
🚀 5-Year Dividend Growth Rate: Around 6%
📅 Next Dividend Date: February 18, 2025
💸 Ex-Dividend Date: January 31, 2025
Dividend Overview
Alliant Energy has long been a dependable dividend payer. Its current yield of 3.16% is right in line with its historical average, which means it isn’t undervalued but also isn’t drastically overvalued.
Utility stocks often have high payout ratios because their revenue streams are predictable, and Alliant is no exception. With a payout ratio of 71.38%, it returns a solid chunk of its earnings to shareholders while keeping enough on hand for reinvestment.
Compared to other utilities, this yield is competitive. It’s not the highest in the sector, but what makes Alliant stand out is its steady dividend growth. Instead of offering an ultra-high yield with little growth, the company has consistently increased its payouts, giving investors a reliable income stream that keeps up with inflation.
Dividend Growth and Safety
For income investors, yield is only part of the equation—growth matters just as much. Alliant Energy has done a great job raising its dividend over time, with an average annual increase of about 6% over the past five years.
That kind of steady growth is crucial. Many high-yield stocks offer little to no dividend increases, meaning inflation eats away at purchasing power. But Alliant continues to raise the bar, making it a more attractive long-term holding.
In terms of safety, the dividend looks well-supported. The payout ratio is reasonable, and since utilities operate in a regulated environment, their cash flow tends to be stable. However, the company does carry a significant amount of debt, which is common for utilities due to their infrastructure needs.
Chart Analysis
The price movement of Alliant Energy (LNT) shows a strong uptrend over the past year, with periods of consolidation and pullbacks along the way. The stock has been trading above both the 50-day and 200-day simple moving averages (SMA), which generally signals a bullish outlook. The 50-day SMA is sloping upward, indicating positive short-term momentum, while the 200-day SMA is also trending higher, confirming the long-term strength.
A key observation is the recent spike in price above $65, followed by a pullback. This could indicate some profit-taking at higher levels, especially since the stock is still trading above its 50-day moving average. Volume has seen noticeable surges during upward moves, suggesting strong buying interest. However, the latest dip in price, accompanied by slightly declining volume, may suggest a temporary cooldown in momentum rather than a reversal.
Relative Strength Index (RSI) is approaching the overbought zone, meaning the stock may need to consolidate or pull back slightly before making another push higher. The last five candlesticks show some upper wicks, which indicates selling pressure at higher levels, but the overall trend remains intact. If the stock holds above the 50-day moving average, it could serve as a key support level for any upcoming dips.
Analyst Ratings
📈 Upgrades:
🔼 Ladenburg Thalmann upgraded Alliant Energy from “Neutral” to “Buy” on August 13, 2024, raising the price target to $62.50. This upgrade came as analysts expressed confidence in the company’s strong financial performance and strategic initiatives aimed at improving operational efficiency. The firm highlighted Alliant’s ability to maintain steady earnings growth while continuing to invest in infrastructure, which could support long-term shareholder returns.
📊 Analysts noted that the company’s ability to navigate regulatory challenges while keeping costs in check made it an attractive pick for dividend-focused investors. The outlook for Alliant’s transition to cleaner energy sources was also viewed as a long-term positive factor.
📉 Downgrades:
🔽 Scotiabank downgraded Alliant Energy from “Sector Outperform” to “Sector Perform” on December 12, 2024, while raising the price target to $67 from $64. Despite the price target increase, analysts expressed concerns about rising operational costs and potential regulatory hurdles that could impact near-term profit margins.
⚠️ The downgrade was not necessarily a bearish call but rather a shift toward a more neutral stance. Analysts suggested that while Alliant remains a solid company, external challenges may limit its growth potential compared to some of its peers in the utility sector.
📉 Barclays maintained an “Equal-Weight” rating on November 6, 2024, while adjusting the price target to $61 from $55. This change reflected a reassessment of the company’s valuation based on evolving market conditions and competition within the utility industry.
📊 The mixed ratings indicate that while Alliant Energy remains a stable dividend-paying utility, analysts are weighing both its strengths—such as consistent financial performance and long-term energy transition plans—against challenges like cost pressures and regulatory oversight.
Earnings Report Summary
Alliant Energy wrapped up 2024 with solid financial results, showing steady growth and a continued commitment to rewarding its shareholders. The company reported earnings of $3.04 per share, an increase from $2.82 per share the previous year. That kind of growth isn’t flashy, but it’s exactly what investors look for in a reliable utility stock—steady, predictable, and moving in the right direction.
One of the standout achievements was the 21st consecutive year of dividend increases. That’s no small feat, especially in a sector where stability is key. Investors who count on Alliant for income can take comfort in knowing the company remains committed to consistent dividend growth.
Renewable energy continues to be a big part of the company’s long-term strategy. In 2024, Alliant added 1.5 gigawatts of solar energy capacity, complementing its already strong 1.8 gigawatts of wind energy. This expansion strengthens its position as a leader in regulated renewable energy, something that’s becoming increasingly important as the energy landscape shifts.
Beyond renewables, Alliant made big moves in economic development, securing agreements for 1.9 gigawatts of data center energy demand at its Big Cedar site in Iowa. That’s a major win, as the demand for data centers keeps growing, and utilities that can meet that need stand to benefit in the long run.
From a financial perspective, cash flow from operations jumped by 35%, adding an extra $300 million to the company’s balance sheet. Cost-cutting efforts also paid off, with operating expenses coming in $30 million lower than in 2023. Additionally, a 5% workforce reduction is expected to lead to further savings moving forward.
Looking ahead to 2025, the company is projecting earnings in the range of $3.15 to $3.25 per share, which would keep them on track for their long-term 5% to 7% earnings growth target. The focus remains on expanding renewable energy projects and supporting economic development, both of which should help drive future performance.
All in all, Alliant Energy delivered a strong 2024, balancing financial discipline with smart investments in renewables and infrastructure. With steady earnings growth, increasing dividends, and a forward-looking energy strategy, the company remains a solid player in the utility space.
Financial Health and Stability
Revenue and Profitability
- Revenue (TTM): $3.98 billion
- Net Income (TTM): $690 million
- Profit Margin: 17.33%
- Quarterly Revenue Growth (YoY): 1.6%
Alliant’s business model is built on stability, and its revenue figures reflect that. The company generates billions in revenue while maintaining a healthy 17.33% profit margin. Growth isn’t explosive, but utilities aren’t meant to be high-growth plays—they’re steady, cash-generating machines.
Debt and Cash Flow
- Total Debt: $10.62 billion
- Debt-to-Equity Ratio: 151.59%
- Operating Cash Flow (TTM): $1.17 billion
- Levered Free Cash Flow (TTM): -$1.09 billion
Debt is a major factor for utility companies since they need to fund infrastructure projects. Alliant carries a sizable debt load, with a debt-to-equity ratio of 151.59%. While that’s on the high side, it’s typical for the sector.
On the positive side, the company generates strong operating cash flow, which helps cover its dividend payments. However, negative free cash flow suggests that Alliant is heavily reinvesting in its business. This isn’t necessarily a bad thing—it could mean the company is upgrading its infrastructure for future growth—but it’s something for investors to watch.
Valuation and Stock Performance
At its current price of $63.44, Alliant Energy trades at a forward P/E ratio of 20.08. That’s not cheap, but it’s also not wildly expensive for a stable utility stock.
- Trailing P/E: 23.89
- Price-to-Book Ratio: 2.36
- PEG Ratio: 2.05
Compared to its historical valuation, the stock isn’t particularly over or undervalued. It has gained more than 30% from its 52-week low of $47.23, showing strong investor confidence. However, it’s down from its 52-week high of $66.54, which could present a better entry point for those looking to start a position.
Risks and Considerations
No investment is without risk, and while utilities are generally seen as safe, there are still a few things to be aware of with Alliant Energy.
🚧 High Debt Levels: The company carries a lot of debt, which is normal for a utility but still something to monitor. Rising interest rates could make refinancing more expensive.
📉 Regulatory Risks: Utilities depend on government approval for rate increases. If regulators don’t approve hikes, revenue growth could be limited.
⚡ Energy Transition Costs: Moving toward cleaner energy sources requires major investment. While this is necessary for long-term sustainability, it can weigh on profits in the short term.
📈 Valuation: The stock is not trading at a bargain price. While it isn’t overvalued, investors might want to watch for pullbacks to get a better entry point.
Final Thoughts
Alliant Energy is a strong choice for dividend investors who value stability and gradual income growth. The 3.16% yield is attractive, and the company’s consistent 6% annual dividend increases make it a solid pick for those looking to grow their income over time.
The main concerns revolve around debt and regulatory risks, but neither is a dealbreaker. Utilities are known for their reliability, and Alliant fits that profile well. For long-term income investors, it remains a steady option in the dividend space.
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