Otter Tail Corp

OTTR

Electric Services

Mkt Cap

$3.729B

PE

12.18

Debt

$947M

Cash

$238.2M

EV

$4.438B

FCF

$157.8M

Market Cap

$3.729B

P/E Ratio

12.18

Debt

$947M

Cash

$238.2M

EV

$4.438B

FCF

$157.8M

Charts data: {"Earnings":[{"time":"2014-12-30","value":57723000},{"time":"2015-12-30","value":59345000},{"time":"2016-12-30","value":62321000},{"time":"2017-12-30","value":72439000},{"time":"2018-12-30","value":82345000},{"time":"2019-12-30","value":86847000},{"time":"2020-12-30","value":95851000},{"time":"2021-12-30","value":176769000},{"time":"2022-12-30","value":284184000},{"time":"2023-12-30","value":294191000}],"Sales":[{"time":"2014-12-30","value":799262000},{"time":"2015-12-30","value":779804000},{"time":"2016-12-30","value":803539000},{"time":"2017-12-30","value":849350000},{"time":"2018-12-30","value":916447000},{"time":"2019-12-30","value":919503000},{"time":"2020-12-30","value":890107000},{"time":"2021-12-30","value":1196844000},{"time":"2022-12-30","value":1469475000},{"time":"2023-12-30","value":1353476000}],"Net Margins":[{"time":"2014-12-30","value":0.07222037329436405},{"time":"2015-12-30","value":0.07610245651471395},{"time":"2016-12-30","value":0.07755815212453906},{"time":"2017-12-30","value":0.08528757284982634},{"time":"2018-12-30","value":0.08985244100313493},{"time":"2019-12-30","value":0.09444993654180574},{"time":"2020-12-30","value":0.10768480643338385},{"time":"2021-12-30","value":0.1476959403230496},{"time":"2022-12-30","value":0.19339151737865565},{"time":"2023-12-30","value":0.21735959854478396}],"Assets":[{"time":"2014-12-30","value":1791279000},{"time":"2015-12-30","value":1820904000},{"time":"2016-12-30","value":1912385000},{"time":"2017-12-30","value":2004278000},{"time":"2018-12-30","value":2052517000},{"time":"2019-12-30","value":2273595000},{"time":"2020-12-30","value":2578354000},{"time":"2021-12-30","value":2754830000},{"time":"2022-12-30","value":2901661000},{"time":"2023-12-30","value":3242568000}],"Stockholders Equity":[{"time":"2014-12-30","value":572766000},{"time":"2015-12-30","value":605023000},{"time":"2016-12-30","value":670104000},{"time":"2017-12-30","value":696892000},{"time":"2018-12-30","value":728863000},{"time":"2019-12-30","value":781482000},{"time":"2020-12-30","value":870966000},{"time":"2021-12-30","value":990777000},{"time":"2022-12-30","value":1217317000},{"time":"2023-12-30","value":1443006000}],"ROE":[{"time":"2014-12-30","value":0.10077937587077446},{"time":"2015-12-30","value":0.09808718015678743},{"time":"2016-12-30","value":0.09300198178193236},{"time":"2017-12-30","value":0.10394580508888035},{"time":"2018-12-30","value":0.1129773359328159},{"time":"2019-12-30","value":0.11113115849117446},{"time":"2020-12-30","value":0.11005136825088464},{"time":"2021-12-30","value":0.1784145170911315},{"time":"2022-12-30","value":0.2334511059978625},{"time":"2023-12-30","value":0.20387371916679486}],"ROA":[{"time":"2014-12-30","value":0.05556420859062156},{"time":"2015-12-30","value":0.0599779010864933},{"time":"2016-12-30","value":0.05809447365462499},{"time":"2017-12-30","value":0.06293238762287467},{"time":"2018-12-30","value":0.06303918554633164},{"time":"2019-12-30","value":0.0593245498868532},{"time":"2020-12-30","value":0.05837212423119556},{"time":"2021-12-30","value":0.09096459672647678},{"time":"2022-12-30","value":0.13562955838052757},{"time":"2023-12-30","value":0.1237186082142302}]}

Otter Tail Corporation, together with its subsidiaries, engages in electric utility, manufacturing, and plastic pipe businesses in the United States. The company's Electric segment produces, transmits, distributes, and sells electric energy in Minnesota, North Dakota, and South Dakota; and operates as a participant in the Midcontinent Independent System Operator, Inc. markets. This segment generates electricity through coal, wind and hydro, and natural gas. It serves approximately residential, commercial, and industrial customers. Its Manufacturing segment engages in the contract machining, metal parts stamping, fabrication and painting, and production of plastic thermoformed horticultural containers, life science and industrial packaging, and material handling components and extruded raw material stock for the recreational vehicle, lawn and garden, agricultural, construction, and industrial and energy equipment end markets. It also manufactures clamshell packing, blister packs, returnable pallets, and handling trays for shipping and storing odd-shaped or difficult-to-handle parts. The company's Plastics segment manufactures polyvinyl chloride pipes for municipal water, rural water, wastewater, storm drainage and water reclamation system, and other uses for customers in the horticulture, medical and life sciences, industrial, recreation, and electronics industries. This segment markets its products to wholesalers and distributors through independent sales representatives, company salespersons, and customer service representatives. The company was formerly known as Otter Tail Power Company and changed its name to Otter Tail Corporation in 2001. Otter Tail Corporation was founded in 1907 and is headquartered in Fergus Falls, Minnesota.

Sector

10-Q
9/30/23
10-Q
6/30/23
10-Q
3/31/23
10-K
12/31/22
10-Q
9/30/22
10-Q
6/30/22
10-Q
3/31/22
10-K
12/31/21
10-Q
9/30/21
10-Q
6/30/21
10-Q
3/31/21
10-K
12/31/20
10-Q
9/30/20
10-Q
6/30/20
10-Q
3/31/20
10-K
12/31/19
10-Q
9/30/19
10-Q
6/30/19
10-Q
3/31/19
10-K
12/31/18
10-Q
9/30/18
10-Q
6/30/18
10-Q
3/31/18
10-K
12/31/17

DCF

Discounted Cash Flow Valuation of Otter Tail Corp

Calculate

Growth Years

Growth

Start

End

Discount

Start

End

Multiple

g\r	+10%	+11%	+12%	+13%	+14%
0%	10	9	8	8	7
+1%	11	10	9	8	8
+2%	13	11	10	9	8
+3%	14	13	11	10	9
+4%	17	14	12	11	10

Years	0	1	2	3	4	5	6	7	8	9	10	TV
FCF	$157.8M	$205.1M	$261M	$324.7M	$395.1M	$469.7M	$545.4M	$618.1M	$683.4M	$736.5M	$773.4M	$7.734B
DCF		$178.4M	$197.3M	$213.5M	$225.9M	$233.5M	$235.8M	$232.4M	$223.4M	$209.4M	$191.2M	$1.912B
Value	$4.052B

Chart P/E ratio

In the chart Earnings are multiplied by this value.

Earnings Growth 24%

Earnings Stability 88%

Competitiveness and MOAT

High margins render the company resilient under dire circumstances, hence able to drive competitors out or acquire them. ROE and ROA measure the average flow generated by each invested dollar. Their marginal value is a forecast of future growth, and it is considered by Buffett and Munger the most important single indicator.

The Net Margin is high enough to offer a good protection on the profits in case of higher costs or higher interests. Furthermore higher margins reduce earnings’ volatility.

Over time the ROA has been increasing indicating a higher marginal ROA with respect to the calculated one, giving a good sign for continued growth.

Years	12-2015	12-2016	12-2017	12-2018	12-2019	12-2020	12-2021	12-2022	12-2023	TTM
Net Margin	7.6%	7.8%	8.5%	9%	9.4%	11%	15%	19%	22%	22%
ROA	6%	5.8%	6.3%	6.3%	5.9%	5.8%	9.1%	14%	12%	13%
ROE	9.8%	9.3%	10%	11%	11%	11%	18%	23%	20%	20%

What is the average Net Margin?

The average Net Margin over the past 5 years is +14.17%.

What is the trend of Net Margin?

The trend of Net Margin over the past 5 years is +2.78%.

What is the average Return on Assets (ROA)?

The average ROA over the past 5 years is +8.85%.

What is the trend of Return on Assets (ROA)?

The trend of ROA over the past 5 years is +1.61%.

What is the average Return on Equity (ROE)?

The average ROE over the past 5 years is +15.83%.

What is the trend of Return on Equity (ROE)?

The trend of ROE over the past 5 years is +2.54%.

Safety & Stabiliy

Being debt the number one cause of investment losses and company death, the ratio Debt/FCF is of utmost importance to guarantee safety. On the other hand the Graham’s stability measures the drawdown of earnings, hence indicating the reliability of the flow generated by the company.

The company has high debt with respect to the cashflow it generates.

The Graham’s stability indicate reliability of earnings, and consideration about the future are more dependable.

Years	12-2015	12-2016	12-2017	12-2018	12-2019	12-2020	12-2021	12-2022	12-2023	TTM
Debt FCF	-20.29	255.84	14.87	16.07	-31.28	-5.68	14.44	3.83	7.74	6.00
Debt Equity	0.96	0.87	0.87	0.84	0.89	1.04	0.87	0.69	0.63	0.63
MIN
Graham Stability	-	-	100%	100%	100%	100%	100%	100%	100%	100%

What is the Debt/FCF?

The Debt/FCF trailing twelve month is 6.00.

What is the trend of Debt/FCF?

The trend of Debt/FCF over the past 5 years is 2.39.

What is the Graham’s Stability?

Graham’s Stability measure stands at 1.00.

Growth

Growth can be dangerous when forecasting, simply projecting the current growth is in general wrong. A company passes through multiple phases, from being young and unprofitable, to the first periods of profitability and high growth, until it arrives at a period of regime with limited growth. Identifying in which phase the company is in may help forecasting.

Earnings growth has been increasing in past years.

Years	12-2016	12-2018	12-2020	12-2022	Trend
Revenue	7.7%	8.1%	15%	-7.9%	1.4%
Net Income	25%	29%	45%	3.5%	5.1%
Stockholders Equity	12%	15%	18%	19%	1.9%
FCF	76%	25%	-	-46%	-180%

What is the 5 year Revenue CAGR?

The Revenue CAGR over the past 5 years is +8.11%.

What is the trend of Revenue growth?

The trend of Revenue growth rate over the past 5 years is +1.4%.

What is the 5 year Earnings CAGR?

The Earnings CAGR over the past 5 years is +29%.

What is the trend of Earnings growth?

The trend of Earnings growth rate over the past 5 years is +5.05%.

What is the 5 year Equity CAGR?

The Equity CAGR over the past 5 years is +14.64%.

What is the trend of Equity growth?

The trend of Equity growth rate over the past 5 years is +1.91%.

What is the 5 year FCF CAGR?

The FCF CAGR over the past 5 years is +25.28%.

What is the trend of FCF growth?

The trend of FCF growth rate over the past 5 years is -178.47%.