Otter Tail (OTTR) & Edison International (NYSE:EIX) Financial Contrast
Otter Tail (NASDAQ:OTTR) and Edison International (NYSE:EIX) are both utilities companies, but which is the superior stock? We will contrast the two businesses based on the strength of their institutional ownership, profitability, dividends, valuation, earnings, risk and analyst recommendations.
Institutional & Insider Ownership
42.7% of Otter Tail shares are held by institutional investors. Comparatively, 81.8% of Edison International shares are held by institutional investors. 1.7% of Otter Tail shares are held by insiders. Comparatively, 0.4% of Edison International shares are held by insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a stock is poised for long-term growth.
This is a breakdown of current recommendations for Otter Tail and Edison International, as provided by MarketBeat.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
Otter Tail currently has a consensus price target of $44.00, suggesting a potential downside of 2.61%. Edison International has a consensus price target of $73.50, suggesting a potential upside of 7.06%. Given Edison International’s stronger consensus rating and higher probable upside, analysts plainly believe Edison International is more favorable than Otter Tail.
Otter Tail pays an annual dividend of $1.34 per share and has a dividend yield of 3.0%. Edison International pays an annual dividend of $2.42 per share and has a dividend yield of 3.5%. Otter Tail pays out 72.0% of its earnings in the form of a dividend. Edison International pays out 53.8% 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. Otter Tail has raised its dividend for 4 consecutive years and Edison International has raised its dividend for 13 consecutive years. Edison International is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.
Volatility and Risk
Otter Tail has a beta of 0.53, meaning that its share price is 47% less volatile than the S&P 500. Comparatively, Edison International has a beta of 0.08, meaning that its share price is 92% less volatile than the S&P 500.
Valuation and Earnings
This table compares Otter Tail and Edison International’s gross revenue, earnings per share (EPS) and valuation.
|Gross Revenue||Price/Sales Ratio||Net Income||Earnings Per Share||Price/Earnings Ratio|
|Otter Tail||$849.35 million||2.11||$72.43 million||$1.86||24.29|
|Edison International||$12.32 billion||1.82||$689.00 million||$4.50||15.26|
Edison International has higher revenue and earnings than Otter Tail. Edison International is trading at a lower price-to-earnings ratio than Otter Tail, indicating that it is currently the more affordable of the two stocks.
This table compares Otter Tail and Edison International’s net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
Edison International beats Otter Tail on 10 of the 17 factors compared between the two stocks.
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.
Edison International Company Profile
Edison International, through its subsidiaries, engages in the generation, transmission, and distribution of electricity in the United States. It generates electricity through hydroelectric, diesel/liquid petroleum gas, natural gas, nuclear, and photovoltaic sources. The company supplies electricity primarily to residential, commercial, industrial, agricultural, and other customers, as well as public authorities through transmission and distribution networks. Its transmission facilities consist of lines ranging from 33 kV to 500 kV and substations; and distribution system comprises approximately 53,000 line miles of overhead lines, 38,000 line miles of underground lines, and 800 substations located in California. The company serves approximately 5 million customers. Edison International was founded in 1886 and is based in Rosemead, California.
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