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Reasons to Add Otter Tail (OTTR) to Your Portfolio Right Now
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Otter Tail Corporation (OTTR - Free Report) , given its two-platform business model that consists of Electric and Manufacturing units, provides attractive investment opportunities in the utility space. The company is enhancing shareholder value through its high-performing, low-cost electric utility and disciplined manufacturing companies.
The Zacks Consensus Estimate for 2021 and 2022 earnings per share is pegged at $3.58 and $3.56, respectively. Earnings estimates for 2021 and 2022 have moved up 17.8% and 13.7%, respectively, in the past 90 days.
The Zacks Consensus Estimate for 2021 and 2022 revenues is pegged at $1.12 billion and $1.14 billion, respectively. The top-line estimates suggest a year-over-year increase of 26% and 1.9%, respectively.
Surprise History & Long-Term Earnings Growth
Otter Tail’s trailing four-quarter earnings surprise is 27.9%, on average. OTTR’s long-term (three to five years) earnings growth is currently projected at 4.7%.
Debt Position
Its total debt to capital ratio is 47.5 compared with the industry average of 52.3. This indicates that the company is managing the business far more efficiently than peers in the same space.
Its times interest earned ratio at the end of third-quarter 2021 was 5.5, up 40 basis points sequentially. The strong ratio indicates that the company will be able to meet debt obligations in the near future without any difficulties.
Investments & Emission Reduction
Otter Tail makes consistent investments to upgrade and maintain the existing infrastructure for providing 24x7 reliable services to the customer base. The company has plans to invest $978 million in the 2022-2026 time period in electric, manufacturing and plastics segments.
Nearly 40% of the planned expenditure will be utilized for the addition of renewable and natural gas sources to its portfolio, and another 31% will be used for adding as well as upgrading electric transmission and distribution lines. The ongoing investments and planned future spending will assist the company to make its systems clean, and provide affordable as well as reliable services to customers.
Focused investment in cleaner sources of energy to produce electricity is expected to reduce carbon emissions from generation units by 50% within 2025 from 2005 levels. It also aims to reduce emissions from generation units by nearly 97% within 2050 from 2005 levels.
Return on Equity & Dividend Yield
Return on Equity (ROE) indicates how efficiently a company is utilizing shareholders’ funds to generate returns. At present, its ROE is 15.86%, higher than the industry average of 9.26%.
Currently, the company has a dividend yield of 2.35% compared with the Zacks S&P 500 composite’s 1.34%.
Price Performance
In the past 12 months, Otter Tail’s shares have gained 60.9% compared with the industry’s growth of 1.6%.
Image Source: Zacks Investment Research
Other Stocks to Consider
Other top-ranked stocks in the same sector include MYR Group (MYRG - Free Report) , California Water Service Group (CWT - Free Report) and Chesapeake Utilities Corporation (CPK - Free Report) , each currently holding a Zacks Rank #2.
MYR Group, California Water Service Group, and Chesapeake Utilities delivered an average earnings surprise of 41.1%, 10.8%, and 12.6%, respectively.
The Zacks Consensus Estimate for 2021 earnings for MYR Group, California Water Service Group, and Chesapeake Utilities has moved up 9.2%, 7.6%, and 3.5%, respectively, in the past 60 days.
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Reasons to Add Otter Tail (OTTR) to Your Portfolio Right Now
Otter Tail Corporation (OTTR - Free Report) , given its two-platform business model that consists of Electric and Manufacturing units, provides attractive investment opportunities in the utility space. The company is enhancing shareholder value through its high-performing, low-cost electric utility and disciplined manufacturing companies.
Let’s focus on the factors that make this Zacks Rank #2 (Buy) stock a strong investment pick at the moment. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Growth Projections
The Zacks Consensus Estimate for 2021 and 2022 earnings per share is pegged at $3.58 and $3.56, respectively. Earnings estimates for 2021 and 2022 have moved up 17.8% and 13.7%, respectively, in the past 90 days.
The Zacks Consensus Estimate for 2021 and 2022 revenues is pegged at $1.12 billion and $1.14 billion, respectively. The top-line estimates suggest a year-over-year increase of 26% and 1.9%, respectively.
Surprise History & Long-Term Earnings Growth
Otter Tail’s trailing four-quarter earnings surprise is 27.9%, on average. OTTR’s long-term (three to five years) earnings growth is currently projected at 4.7%.
Debt Position
Its total debt to capital ratio is 47.5 compared with the industry average of 52.3. This indicates that the company is managing the business far more efficiently than peers in the same space.
Its times interest earned ratio at the end of third-quarter 2021 was 5.5, up 40 basis points sequentially. The strong ratio indicates that the company will be able to meet debt obligations in the near future without any difficulties.
Investments & Emission Reduction
Otter Tail makes consistent investments to upgrade and maintain the existing infrastructure for providing 24x7 reliable services to the customer base. The company has plans to invest $978 million in the 2022-2026 time period in electric, manufacturing and plastics segments.
Nearly 40% of the planned expenditure will be utilized for the addition of renewable and natural gas sources to its portfolio, and another 31% will be used for adding as well as upgrading electric transmission and distribution lines. The ongoing investments and planned future spending will assist the company to make its systems clean, and provide affordable as well as reliable services to customers.
Focused investment in cleaner sources of energy to produce electricity is expected to reduce carbon emissions from generation units by 50% within 2025 from 2005 levels. It also aims to reduce emissions from generation units by nearly 97% within 2050 from 2005 levels.
Return on Equity & Dividend Yield
Return on Equity (ROE) indicates how efficiently a company is utilizing shareholders’ funds to generate returns. At present, its ROE is 15.86%, higher than the industry average of 9.26%.
Currently, the company has a dividend yield of 2.35% compared with the Zacks S&P 500 composite’s 1.34%.
Price Performance
In the past 12 months, Otter Tail’s shares have gained 60.9% compared with the industry’s growth of 1.6%.
Other Stocks to Consider
Other top-ranked stocks in the same sector include MYR Group (MYRG - Free Report) , California Water Service Group (CWT - Free Report) and Chesapeake Utilities Corporation (CPK - Free Report) , each currently holding a Zacks Rank #2.
MYR Group, California Water Service Group, and Chesapeake Utilities delivered an average earnings surprise of 41.1%, 10.8%, and 12.6%, respectively.
The Zacks Consensus Estimate for 2021 earnings for MYR Group, California Water Service Group, and Chesapeake Utilities has moved up 9.2%, 7.6%, and 3.5%, respectively, in the past 60 days.