Otter Tail (NASDAQ:OTTR – Get Free Report) and Eversource Energy (NYSE:ES – Get Free Report) are both utilities companies, but which is the superior business? We will compare the two companies based on the strength of their dividends, risk, analyst recommendations, profitability, earnings, institutional ownership and valuation.
Analyst Recommendations
This is a summary of recent ratings and target prices for Otter Tail and Eversource Energy, as reported by MarketBeat.
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score | |
| Otter Tail | 1 | 3 | 1 | 0 | 2.00 |
| Eversource Energy | 3 | 7 | 4 | 0 | 2.07 |
Otter Tail currently has a consensus price target of $91.00, indicating a potential upside of 13.95%. Eversource Energy has a consensus price target of $73.17, indicating a potential upside of 5.15%. Given Otter Tail’s higher possible upside, research analysts clearly believe Otter Tail is more favorable than Eversource Energy.
Valuation & Earnings
This table compares Otter Tail and Eversource Energy”s top-line revenue, earnings per share (EPS) and valuation.
| Gross Revenue | Price/Sales Ratio | Net Income | Earnings Per Share | Price/Earnings Ratio | |
| Otter Tail | $1.30 billion | 2.57 | $275.89 million | $4.19 | 19.06 |
| Eversource Energy | $13.55 billion | 1.93 | $1.69 billion | $3.79 | 18.36 |
Eversource Energy has higher revenue and earnings than Otter Tail. Eversource Energy is trading at a lower price-to-earnings ratio than Otter Tail, indicating that it is currently the more affordable of the two stocks.
Institutional & Insider Ownership
61.3% of Otter Tail shares are owned by institutional investors. Comparatively, 80.0% of Eversource Energy shares are owned by institutional investors. 2.0% of Otter Tail shares are owned by insiders. Comparatively, 0.2% of Eversource Energy shares are owned by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a stock will outperform the market over the long term.
Risk and Volatility
Otter Tail has a beta of 0.42, indicating that its share price is 58% less volatile than the S&P 500. Comparatively, Eversource Energy has a beta of 0.66, indicating that its share price is 34% less volatile than the S&P 500.
Dividends
Otter Tail pays an annual dividend of $2.31 per share and has a dividend yield of 2.9%. Eversource Energy pays an annual dividend of $3.15 per share and has a dividend yield of 4.5%. Otter Tail pays out 55.1% of its earnings in the form of a dividend. Eversource Energy pays out 83.1% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Otter Tail has raised its dividend for 12 consecutive years and Eversource Energy has raised its dividend for 2 consecutive years.
Profitability
This table compares Otter Tail and Eversource Energy’s net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets | |
| Otter Tail | 13.45% | 13.41% | 6.04% |
| Eversource Energy | 10.38% | 10.68% | 2.73% |
Summary
Otter Tail beats Eversource Energy on 9 of the 17 factors compared between the two stocks.
About Otter Tail
Otter Tail Corporation, together with its subsidiaries, engages in electric utility, manufacturing, and plastic pipe businesses in the United States. It operates through three segments: Electric, Manufacturing, and Plastics. The 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 markets. This segment generates electricity through coal, fuel oil, solar, wind, and natural gas. It serves approximately residential, commercial, and industrial customers. The Manufacturing segment engages in the contract machining, metal parts stamping, fabrication and painting, 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. The 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.
About Eversource Energy
Eversource Energy, a public utility holding company, engages in the energy delivery business. The company operates through Electric Distribution, Electric Transmission, Natural Gas Distribution, and Water Distribution segments. It is involved in the transmission and distribution of electricity; solar power facilities; and distribution of natural gas. The company operates regulated water utilities that provide water services to approximately 241,000 customers. It serves residential, commercial, industrial, municipal and fire protection, and other customers in Connecticut, Massachusetts, and New Hampshire. The company was formerly known as Northeast Utilities and changed its name to Eversource Energy in April 2015. Eversource Energy was incorporated in 1927 and is headquartered in Springfield, Massachusetts.
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