Otter Tail Corp

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OTTR : NASDAQ : Utilities
$37.65 | %
Today's Range: 37.35 - 38.2
Avg. Daily Volume: 107700.0
01/20/17 - 4:00 PM ET

Financial Analysis


OTTER TAIL CORP's gross profit margin for the third quarter of its fiscal year 2016 is essentially unchanged when compared to the same period a year ago. Sales and net income have dropped, although the growth in revenues underperformed the average competitor within the industry, the net income growth did not. OTTER TAIL CORP has very weak liquidity. Currently, the Quick Ratio is 0.31 which clearly shows a lack of ability to cover short-term cash needs. The company's liquidity has decreased from the same period last year.

During the same period, stockholders' equity ("net worth") has increased by 9.83% from the same quarter last year. The key liquidity measurements indicate that the company is in a position in which financial difficulties could develop in the near future.

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Income Statement Q3 FY16 Q3 FY15
Net Sales ($mil)197.18200.02
EBITDA ($mil)45.644.77
EBIT ($mil)27.2829.63
Net Income ($mil)14.6215.39


Balance Sheet Q3 FY16 Q3 FY15
Cash & Equiv. ($mil)0.00.55
Total Assets ($mil)1868.911856.5
Total Debt ($mil)583.42585.5
Equity ($mil)656.72597.92


Profitability Q3 FY16 Q3 FY15
Gross Profit Margin23.1322.38
EBITDA Margin23.1222.38
Operating Margin13.8414.81
Sales Turnover0.430.42
Return on Assets3.172.97
Return on Equity9.149.56
Debt Q3 FY16 Q3 FY15
Current Ratio0.831.16
Debt/Capital0.470.49
Interest Expense8.037.73
Interest Coverage3.43.83


Share Data Q3 FY16 Q3 FY15
Shares outstanding (mil)39.2337.73
Div / share0.310.31
EPS0.380.42
Book value / share16.7415.85
Institutional Own % n/a n/a
Avg Daily Volume105862.092291.0

Valuation


BUY. The current P/E ratio indicates a premium compared to an average of 23.46 for the Electric Utilities industry and a value on par with the S&P 500 average of 25.49. Conducting a second comparison, its price-to-book ratio of 2.27 indicates a discount versus the S&P 500 average of 2.84 and a premium versus the industry average of 1.69. The price-to-sales ratio is below both the S&P 500 average and the industry average, indicating a discount. After reviewing these and other key valuation criteria, OTTER TAIL CORP proves to trade at a premium to investment alternatives within the industry.


Price/Earnings
1 2 3 4 5
premium   discount
  Price/Cash Flow
1 2 3 4 5
premium   discount
OTTR 24.02 Peers 23.46   OTTR 9.10 Peers 7.04

Average. An average P/E ratio can signify an industry neutral price for a stock and an average growth expectation.

OTTR is trading at a valuation on par with its peers.

 

Premium. The P/CF ratio, a stock’s price divided by the company's cash flow from operations, is useful for comparing companies with different capital requirements or financing structures.

OTTR is trading at a significant premium to its peers.

 
Price/Projected
Earnings
1 2 3 4 5
premium   discount
  Price to
Earnings/Growth
1 2 3 4 5
premium   discount
OTTR 22.06 Peers 17.48   OTTR 12.51 Peers 4.59

Premium. A higher price-to-projected earnings ratio than its peers can signify a more expensive stock or higher future growth expectations.

OTTR is trading at a significant premium to its peers.

 

Premium. The PEG ratio is the stock’s P/E divided by the consensus estimate of long-term earnings growth. Faster growth can justify higher price multiples.

OTTR trades at a significant premium to its peers.

 
Price/Book
1 2 3 4 5
premium   discount
  Earnings Growth
1 2 3 4 5
lower   higher
OTTR 2.27 Peers 1.69   OTTR 3.26 Peers 3.68

Premium. A higher price-to-book ratio makes a stock less attractive to investors seeking stocks with lower market values per dollar of equity on the balance sheet.

OTTR is trading at a significant premium to its peers.

 

Lower. Elevated earnings growth rates can lead to capital appreciation and justify higher price-to-earnings ratios.

However, OTTR is expected to trail its peers on the basis of its earnings growth rate.

 
Price/Sales
1 2 3 4 5
premium   discount
  Sales Growth
1 2 3 4 5
premium   discount
OTTR 1.87 Peers 2.13   OTTR 1.43 Peers -1.80

Discount. In the absence of P/E and P/B multiples, the price-to-sales ratio can display the value investors are placing on each dollar of sales.

OTTR is trading at a discount to its industry on this measurement.

 

Higher. A sales growth rate that exceeds the industry implies that a company is gaining market share.

OTTR has a sales growth rate that significantly exceeds its peers.

 

 

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