Contrasting Otter Tail (NASDAQ:OTTR) and Eversource Energy (NYSE:ES)

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

Volatility & Risk

Eversource Energy has a beta of 0.66, indicating that its share price is 34% less volatile than the S&P 500. Comparatively, Otter Tail has a beta of 0.42, indicating that its share price is 58% less volatile than the S&P 500.

Dividends

Eversource Energy pays an annual dividend of $3.15 per share and has a dividend yield of 4.4%. Otter Tail pays an annual dividend of $2.31 per share and has a dividend yield of 2.9%. Eversource Energy pays out 81.6% 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 pays out 49.8% of its earnings in the form of a dividend. Eversource Energy has raised its dividend for 2 consecutive years and Otter Tail has raised its dividend for 12 consecutive years.

Earnings and Valuation

This table compares Eversource Energy and Otter Tail”s revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Eversource Energy	$13.55 billion	2.00	$1.69 billion	$3.86	18.65
Otter Tail	$1.30 billion	2.58	$275.89 million	$4.64	17.24

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

Institutional and Insider Ownership

80.0% of Eversource Energy shares are held by institutional investors. Comparatively, 61.3% of Otter Tail shares are held by institutional investors. 0.2% of Eversource Energy shares are held by insiders. Comparatively, 2.0% of Otter Tail shares are held by insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a stock will outperform the market over the long term.

Profitability

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

	Net Margins	Return on Equity	Return on Assets
Eversource Energy	10.38%	10.68%	2.73%
Otter Tail	13.45%	13.41%	6.04%

Analyst Ratings

This is a breakdown of recent ratings and recommmendations for Eversource Energy and Otter Tail, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Eversource Energy	3	6	4	0	2.08
Otter Tail	1	3	1	0	2.00

Eversource Energy currently has a consensus price target of $72.91, suggesting a potential upside of 1.29%. Otter Tail has a consensus price target of $91.00, suggesting a potential upside of 13.75%. Given Otter Tail’s higher possible upside, analysts plainly believe Otter Tail is more favorable than Eversource Energy.

Summary

Otter Tail beats Eversource Energy on 9 of the 17 factors compared between the two stocks.

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.

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.