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.
Discounted Cash Flow Valuation of Otter Tail Corp
In the chart Earnings are multiplied by this value.
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 average Net Margin over the past 5 years is +11.97%.
The trend of Net Margin over the past 5 years is +2.08%.
The average ROA over the past 5 years is +7.84%.
The trend of ROA over the past 5 years is +1.28%.
The average ROE over the past 5 years is +14.17%.
The trend of ROE over the past 5 years is +2.41%.
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 Debt/FCF trailing twelve month is 6.18.
The trend of Debt/FCF over the past 5 years is -0.99.
Graham’s Stability measure stands at 1.00.
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.
The Revenue CAGR over the past 5 years is +11.59%.
The trend of Revenue growth rate over the past 5 years is +3.77%.
The Earnings CAGR over the past 5 years is +31.44%.
The trend of Earnings growth rate over the past 5 years is +7.15%.
The Equity CAGR over the past 5 years is +11.8%.
The trend of Equity growth rate over the past 5 years is +1.53%.
The FCF CAGR over the past 5 years is +39.91%.
The trend of FCF growth rate over the past 5 years is -182.71%.