Otter Tail Corporation (NASDAQ: OTTR) and Dominion Energy (NYSE:D) are both utilities companies, but which is the superior business? We will contrast the two businesses based on the strength of their earnings, dividends, profitability, institutional ownership, risk, analyst recommendations and valuation.

Analyst Recommendations

This is a summary of recent ratings and target prices for Otter Tail Corporation and Dominion Energy, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Otter Tail Corporation 0 1 1 0 2.50
Dominion Energy 0 7 2 0 2.22

Otter Tail Corporation presently has a consensus target price of $41.00, suggesting a potential downside of 4.21%. Dominion Energy has a consensus target price of $79.83, suggesting a potential upside of 0.75%. Given Dominion Energy’s higher probable upside, analysts plainly believe Dominion Energy is more favorable than Otter Tail Corporation.

Profitability

This table compares Otter Tail Corporation and Dominion Energy’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Otter Tail Corporation 8.35% 10.14% 3.57%
Dominion Energy 17.48% 14.04% 3.29%

Valuation & Earnings

This table compares Otter Tail Corporation and Dominion Energy’s top-line revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
Otter Tail Corporation $820.02 million 2.06 $191.22 million $1.72 24.88
Dominion Energy $12.42 billion 4.10 $6.23 billion $3.46 22.90

Dominion Energy has higher revenue and earnings than Otter Tail Corporation. Dominion Energy is trading at a lower price-to-earnings ratio than Otter Tail Corporation, indicating that it is currently the more affordable of the two stocks.

Volatility and Risk

Otter Tail Corporation has a beta of 0.79, indicating that its stock price is 21% less volatile than the S&P 500. Comparatively, Dominion Energy has a beta of 0.29, indicating that its stock price is 71% less volatile than the S&P 500.

Dividends

Otter Tail Corporation pays an annual dividend of $1.28 per share and has a dividend yield of 3.0%. Dominion Energy pays an annual dividend of $3.02 per share and has a dividend yield of 3.8%. Otter Tail Corporation pays out 74.4% of its earnings in the form of a dividend. Dominion Energy pays out 87.3% 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 Corporation has increased its dividend for 8 consecutive years.

Insider & Institutional Ownership

40.6% of Otter Tail Corporation shares are owned by institutional investors. Comparatively, 64.5% of Dominion Energy shares are owned by institutional investors. 1.4% of Otter Tail Corporation shares are owned by insiders. Comparatively, 0.4% of Dominion Energy shares are owned by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a stock will outperform the market over the long term.

Summary

Dominion Energy beats Otter Tail Corporation on 10 of the 17 factors compared between the two stocks.

Otter Tail Corporation Company Profile

Otter Tail Corporation is a holding company. The Company operates through three segments: Electric, Manufacturing and Plastics. The Electric segment includes the production, transmission, distribution and sale of electric energy in Minnesota, North Dakota and South Dakota by Otter Tail Power Company (OTP). The Manufacturing segment consists of businesses in manufacturing activities, such as contract machining, metal parts stamping, fabrication and painting, and production of material and handling trays and horticultural containers. These businesses have manufacturing facilities in Georgia, Illinois and Minnesota and sell products primarily in the United States. The Plastics segment consists of businesses producing polyvinyl chloride (PVC) pipe at plants in North Dakota and Arizona. The PVC pipe is sold primarily in the upper Midwest and Southwest regions of the United States. The Company’s manufacturing and plastic pipe businesses are owned by its subsidiary, Varistar Corporation.

Dominion Energy Company Profile

Dominion Energy, Inc., formerly Dominion Resources, Inc., is a producer and transporter of energy. Dominion is focused on its investment in regulated electric generation, transmission and distribution and regulated natural gas transmission and distribution infrastructure. It operates through three segments: Dominion Virginia Power operating segment (DVP), Dominion Generation, Dominion Energy, and Corporate and Other. The DVP segment includes regulated electric distribution and regulated electric transmission. The Dominion Generation segment includes regulated electric fleet and merchant electric fleet. The Dominion Energy segment includes gas transmission and storage, gas gathering and processing, liquefied natural gas import and storage, and nonregulated retail energy marketing. As of December 31, 2016, Dominion served utility and retail energy customers, and operated an underground natural gas storage system with approximately one trillion cubic feet of storage capacity.

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