Otter Tail Corp (OTTR) stock analysis

P/E above its 5-year median

Otter Tail's P/E of 18.6 is above its own 5-year median of 12.2.

P/E below the industry

Otter Tail's P/E of 18.6 is below the Electric Services median of 20.9.

EV/EBITDA above its 5-year median

Otter Tail's EV/EBITDA of 10.1 is above its 5-year median of 8.1.

P/B below the industry

Otter Tail's price-to-book of 1.71 is below the Electric Services median of 2.02.

Trading below fair value

The share price of $77.82 is below our fair value estimate of $78.49.

Margin of safety under 20%

The price is 0.9% below fair value, less than the 20% cushion we look for.

Revenue growing under 10% a year

Revenue grew -4.0% a year over the last three fiscal years, short of the 10% we look for.

EPS growing under 10% a year

Diluted EPS grew -1.1% a year over the last three fiscal years.

Earnings growth not accelerating

Net income grew -36.8% over the last twelve months, against a 5-year average of 23.5% a year.

Growing slower than the industry

Revenue grew 0.0% over the last twelve months; the Electric Services median is 7.8%.

Guidance lowered

Otter Tail lowered its 2026 Corporate segment EPS outlook on Feb 17, 2026.

Gross margin slipping

Gross margin was 66.4% over the last twelve months, against 69.0% a year earlier.

Return on equity under 15%

Return on equity was 9.4% over the last twelve months and averaged 20.4% over five years; we look for 15% on both.

Return on capital under 10%

Return on invested capital was 9.4%, below the 10% that usually covers the cost of capital.

Return on equity above the industry

Otter Tail's return on equity of 9.4% is above the Electric Services median of 8.3%.

Earnings grew over 5 years

Net income grew 23.5% a year on average over the last five fiscal years.

Net margin below its 5-year average

Net margin was 13.6% over the last twelve months, against a 5-year average of 19.9%.

Net margin above the industry

Otter Tail's net margin of 13.6% is above the Electric Services median of 8.8%.

Low debt

Debt is 7.9% of shareholders' equity, under the 40% we consider low.

Debt falling against equity

Debt to equity fell from 97.1% five years ago to 7.9%.

Debt covered by cash flow

Operating cash flow over the last twelve months equals 269% of total debt.

Interest not well covered

Operating income covers interest expense 3.9 times; we look for at least 5.

Short-term assets cover short-term debts

Current assets are 1.37 times current liabilities.

Elevated bankruptcy risk

The Altman Z-score is 1.71; above 3 is the safe zone and below 1.8 the distress zone.

Pays a dividend

Otter Tail paid dividends worth 2.9% of the share price over the last twelve months.

Yield below Treasuries

The 2.9% yield is below the 4.4% on a 1-year Treasury.

Yield below the top quarter

The top quarter of US dividend payers yield 3.8% or more; Otter Tail yields 2.9%.

Dividend not cut

The dividend per share has not fallen by more than 10% in any of the last 10 fiscal years.

Covered by earnings

Dividends take 53.8% of net income.

Cash-flow cover

Needs dividends paid and free cash flow.