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4 Reasons to Add Otter Tail (OTTR) to Your Portfolio 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 2023 and 2024 earnings per share is pegged at $5.79 and $4.08, respectively. The bottom-line estimates suggest an increase of 22.9% and 24.4%, respectively, in the past 60 days.
Otter Tail’s trailing four-quarter earnings surprise is 31%, on average.
Stable Investments
OTTR makes consistent investments to upgrade and maintain its existing infrastructure to provide 24x7 reliable services to its customer base. The company has plans to invest $1.1 billion in the 2023-2027 time period to further strengthen its operations.
Nearly 39% of planned expenditures will be utilized for adding renewable and natural gas assets to its portfolio and another 42% 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 in making its systems clean and providing affordable and reliable services to customers.
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 21.68%, higher than the industry average of 6.03%.
Currently, the company has a dividend yield of 2.3% compared with the Zacks S&P 500 composite’s 1.65%.
Debt Level & Liquidity Ratio
Its total debt to capital ratio is 39.7 compared with the industry average of 53.94. This indicates that the company is managing its business far more efficiently than its peers in the same space.
Its current ratio at the end of second-quarter 2023 was 1.74. The strong ratio indicates that the company will be able to meet its debt obligations in the near future without any difficulties.
Price Performance
In the past six months, the stock has gained 9.9% against the industry’s decline of 4.2%.
Image Source: Zacks Investment Research
Other Stocks to Consider
Other top-ranked stocks in the same sector are American Water Works (AWK - Free Report) , ALLETE (ALE - Free Report) and MYR Group (MYRG - Free Report) , currently carrying a Zacks Rank #2 (Buy).
American Water Works, ALLETE and MYR Group delivered an average earnings surprise of 13.4%, 15.4% and 3.9%, respectively, in the last reporting quarter.
The Zacks Consensus Estimate for 2023 earnings for American Water Works, ALLETE and MYR Group has moved up 0.6%, 1.1% and 0.9%, respectively, in the past 60 days.
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4 Reasons to Add Otter Tail (OTTR) to Your Portfolio 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 #1 (Strong Buy) stock a strong investment pick at the moment. You can see the complete list of today’s Zacks #1 Rank stocks here.
Growth Projections & Surprise History
The Zacks Consensus Estimate for 2023 and 2024 earnings per share is pegged at $5.79 and $4.08, respectively. The bottom-line estimates suggest an increase of 22.9% and 24.4%, respectively, in the past 60 days.
Otter Tail’s trailing four-quarter earnings surprise is 31%, on average.
Stable Investments
OTTR makes consistent investments to upgrade and maintain its existing infrastructure to provide 24x7 reliable services to its customer base. The company has plans to invest $1.1 billion in the 2023-2027 time period to further strengthen its operations.
Nearly 39% of planned expenditures will be utilized for adding renewable and natural gas assets to its portfolio and another 42% 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 in making its systems clean and providing affordable and reliable services to customers.
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 21.68%, higher than the industry average of 6.03%.
Currently, the company has a dividend yield of 2.3% compared with the Zacks S&P 500 composite’s 1.65%.
Debt Level & Liquidity Ratio
Its total debt to capital ratio is 39.7 compared with the industry average of 53.94. This indicates that the company is managing its business far more efficiently than its peers in the same space.
Its current ratio at the end of second-quarter 2023 was 1.74. The strong ratio indicates that the company will be able to meet its debt obligations in the near future without any difficulties.
Price Performance
In the past six months, the stock has gained 9.9% against the industry’s decline of 4.2%.
Image Source: Zacks Investment Research
Other Stocks to Consider
Other top-ranked stocks in the same sector are American Water Works (AWK - Free Report) , ALLETE (ALE - Free Report) and MYR Group (MYRG - Free Report) , currently carrying a Zacks Rank #2 (Buy).
American Water Works, ALLETE and MYR Group delivered an average earnings surprise of 13.4%, 15.4% and 3.9%, respectively, in the last reporting quarter.
The Zacks Consensus Estimate for 2023 earnings for American Water Works, ALLETE and MYR Group has moved up 0.6%, 1.1% and 0.9%, respectively, in the past 60 days.