Portland General Electric (POR) & Otter Tail (OTTR) Head-To-Head Analysis

Portland General Electric (NYSE: POR) and Otter Tail (NASDAQ:OTTR) are both utilities companies, but which is the better stock? We will contrast the two companies based on the strength of their valuation, dividends, risk, institutional ownership, earnings, analyst recommendations and profitability.

Profitability

This table compares Portland General Electric and Otter Tail’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Portland General Electric 9.74% 8.59% 2.66%
Otter Tail 9.02% 11.57% 4.07%

Insider and Institutional Ownership

92.4% of Portland General Electric shares are held by institutional investors. Comparatively, 42.9% of Otter Tail shares are held by institutional investors. 0.6% of Portland General Electric shares are held by insiders. Comparatively, 1.7% of Otter Tail shares are held by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a company is poised for long-term growth.

Dividends

Portland General Electric pays an annual dividend of $1.45 per share and has a dividend yield of 3.2%. Otter Tail pays an annual dividend of $1.34 per share and has a dividend yield of 2.8%. Portland General Electric pays out 63.3% of its earnings in the form of a dividend. Otter Tail pays out 72.0% of its earnings in the form of a dividend. Both companies have healthy payout ratios and should be able to cover their dividend payments with earnings for the next several years. Portland General Electric has increased its dividend for 12 consecutive years and Otter Tail has increased its dividend for 4 consecutive years. Portland General Electric is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Analyst Ratings

This is a summary of recent ratings for Portland General Electric and Otter Tail, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Portland General Electric 2 6 1 0 1.89
Otter Tail 1 2 0 0 1.67

Portland General Electric currently has a consensus price target of $42.06, indicating a potential downside of 7.09%. Otter Tail has a consensus price target of $44.00, indicating a potential downside of 8.71%. Given Portland General Electric’s stronger consensus rating and higher probable upside, analysts plainly believe Portland General Electric is more favorable than Otter Tail.

Valuation and Earnings

This table compares Portland General Electric and Otter Tail’s gross revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Portland General Electric $2.01 billion 2.01 $187.00 million $2.29 19.77
Otter Tail $849.35 million 2.25 $72.43 million $1.86 25.91

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

Volatility and Risk

Portland General Electric has a beta of 0.23, suggesting that its stock price is 77% less volatile than the S&P 500. Comparatively, Otter Tail has a beta of 0.66, suggesting that its stock price is 34% less volatile than the S&P 500.

Summary

Portland General Electric beats Otter Tail on 11 of the 17 factors compared between the two stocks.

Portland General Electric Company Profile

Portland General Electric Company, an integrated electric utility company, engages in the generation, wholesale purchase, transmission, distribution, and retail sale of electricity in the state of Oregon. The company operates seven thermal plants; seven hydroelectric plants; and two wind farms. As of December 31, 2017, it owned an electric transmission system consisting of 1,250 circuit miles, including 287 circuit miles of 500 kilovolt line, 402 circuit miles of 230 kilovolt line, and 561 miles of 115 kilovolt line. It has 27,457 circuit miles of distribution lines. The company also purchases and sells electricity and natural gas in the wholesale market to utilities and power marketers in the United States and Canada. It serves approximately 875,000 residential, commercial, and industrial customers in the Portland/Salem metropolitan area of Oregon. The company was founded in 1930 and is headquartered in Portland, Oregon.

Otter Tail Company Profile

Otter Tail Corporation, together with its subsidiaries, engages in electric, manufacturing, and plastics 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 and oil sources. It serves approximately 130,000 residential, commercial, industrial, and other customers. Otter Tail Corporation's Manufacturing segment stamps, fabricates, welds, paints, and laser cuts metal components for use in the recreational vehicle, agricultural, oil and gas, lawn and garden, industrial equipment, health and fitness, and enclosure industries; manufactures and fabricates parts for off-road equipment, mining machinery, oil fields and offshore oil rigs, wind industry components, broadcast antennae, and farm equipment; and provides laser cutting services and stamping to weldments and assemblies for metal fabrication buyers and original equipment manufacturers. It also manufactures and sells thermoformed products for the horticulture industry; and clamshell packing, blister packs, returnable pallets, and handling trays for shipping and storing odd-shaped or difficult-to-handle parts for customers in the medical and life sciences, industrial, recreation, and electronics industries. The company's Plastics segment manufactures polyvinyl chloride pipes for municipal water, rural water, wastewater, storm drainage system, and other uses. 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.

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