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RISK CONCERN
Investment Strategy, Risk Analysis, and Insights by Chartered Professionals
Otter Tail Corporation (XNAS:OTTR) In-Depth Stock/Fundamental/Options Analysis Today
Primary Facts
OTTR
Name:
Otter Tail Corporation (XNAS:OTTR)
Sector:
16.71M
Industry:
Utilities�Diversified
CEO:
Mr. Charles MacFarlane
Total Employees:
2,487
Our Technological Advancement Rating
Our Rating:
A
Technological advancement compared to industry is 371.59% higher
ANALYSIS OF ALL CRITICAL FACTORS & RISKS RELATED TO THE STOCK & FUNDAMENTAL/LONG-TERM ANALYSIS OF OTTER TAIL CORPORATION(OTTR) AS PER DATA ANALYSIS OF LAST 3 YEARS AND COMPARISON WITH COMPETITORS/PEERS, AND UTILITIES�DIVERSIFIED INDUSTRY. DATE: 07/09/2022
Primary Targets/Price Insights
Previous Close ($) :
75.64
One Month Price Target:
$75.82
Six Month Price Target :
$76.72
Likely Price in One Year's Time:
Ticker:
$77.81
Likely Trading Range Today Under (Normal Volatility)
$75.39
Price Upper limit ($) :
$76.03
Price Lower limit ($) :
Crash Risk Prep/Key Price Levels (High Volatility/Risk)
Price, as per data analysis, isn't likely to fall below:
Today:
$71.79
This week:
$67.03
This month :
$58.43
Other Primary facts
Market Cap:
3.12B
Market Cap Classification:
Mid Cap
Number of Shares
IPO Date:
41.63M
Best/Worst Daily Performance (Last 3+ Years)
Highest Daily Appreciation:
24.87%
-20.74%
Worst Daily Decline:
Our Options Trading Entry Points
Iron Condor entry points for options expiring in 1 week's time
Low risk (<2%) entry points
Buy Call:
Sell Call:
Buy Put:
Sell Put:
$93.49
$85.22
$57.79
$66.06
Medium risk (<10%) entry points
Buy Call
Sell Call
$82.52
Buy Put:
Sell Put:
$80.76
$68.73
$70.52
These entry points can be used for other strategies, such as butterflies, straddles, etc.
Risk-Adjusted returns (Sharpe Ratio) of
OTTR
Sharpe Ratio:
3.30%
Comparison:
OTTR, is amongst the top 20% stocks with highest risk-adjusted returns
Sharpe ratio is 92.62% higher than the industry
& ratio is 44.87% higher than the market/S&P 500 average
Average Returns/Yield of
OTTR
Daily returns:
0.09%
Weekly returns:
0.46%
Monthly returns:
1.84%
Yearly returns:
11.80%
Comparison of returns:
Average annual returns/yield (last 3 years) is 87.33% above industry average
Classification:
OTTR, is amongst the top 40% highest yielding stocks in terms of daily returns
Results of T-Test of Returns:
0.29
Statistical test of Returns:
OTTR has yielded returns statistically similar to the market
Volatility (measured by Standard Deviation)
Daily Volatility:
2.52%
Weekly Volatility:
5.64%
Monthly Volatility:
11.28%
Yearly Volatility:
39.07%
Volitlilty of last five days (Measured by Standard Deviation)
Average Volatility of this Week:
1.30%
Volatility in last five trading days has been -48.28% below long-term volatility
Value at Risk Analysis (VaR)
Daily VaR:
-5.09%
Weekly VaR:
-11.38%
Monthly VaR:
-22.75%
How Much Can the price of
OTTR
Decline in a Recession?
Likely price decline in a recession:
Base case (decline):
-19%
Worst case (decline):
-78.82%
This translates to price declining to:
$61.22
This translates to price declining to:
$16.02
Severe Crash Probability
Risk of crash in next 6/12 months: Very high (>70%)
What is Value at Risk (VaR)?
Risk Fundamentals
OTTR is a 60.59% riskier investment compared to the market/S&P 500 & is 37.58% riskier than Nasdaq (IXIC)
Risk (measured by volatility) is 12.36% above industry average
Overall, it is amongst the top 50% most risky stocks
Beta Examination of
OTTR
Beta in relation to market/S&P 500--0.43
Expected beta in 1 year's time:
0.51
Expected beta in 3 year's time:
0.721
Unlevered (debt free) Beta:
0.271
Beta in relation to Nasdaq (XNAS):
0.612
Beta in relation to all global stocks::
1.085
Beta Comparison & Analysis
Beta of competitors/peers::
0.545
Beta is -21.77% lower than peers
Average Industry Beta:
0.572
Beta is -25.51% below industry average
Sustainable Growth Rate Analysis
Sustainable growth rate for this stock/firm:
9.97%
Sustainable growth rate is 113.07% above industry average
Alpha provided | Alpha Analysis
Alpha provided:
0.160
Alpha is 238.75% above industry average alpha yield
Alpha is 1021% higher than market/& is unsustainably high
Analysis of Cost of Capital of
OTTR
Equity cost of capital:
0.061
Equity cost of capital is -14.14% below industry mean WACC
Unlevered (without debt) cost of capital:
3.86%
Before-tax cost of debt:
4.33%
After-tax cost of debt:
3.42%
Overall debt rating:
Lower BB medium grade (Fifth highest grade)
Weighted average cost of capital (WACC):
3.42%
WACC is -10.37% below industry mean WACC
Key Per-Share Metrics & Analysis
Revenue per share:
$31.47
Revenue growth rate per share of (3Y):
3.01
Annual revenue growth rate is 256.23% above the industry average
EPS:
$5.22
Expected Annual growth rate of EPS (3Y):
24.54%
Expected future EPS growth rate is 816.65% higher than the Utilities�Diversified industry
Free cash flow (FCF) per share:
$2.58
Balance sheet equity growth per share: 16.34%
Equity growth rate per share is 1072.00% higher than the industry
Debt per share
$17.63
EBITDA per share
$9.54
Valuation Analysis Today of
OTTR
P/E Ratio:
12.08
P/E Ratio of Competitors/Peers:
38.92
P/E ratio is -68.96% lower than main peers & is -83.11% lower than the industry
Stock price/value with industry average P/E ratio: $373.38
OTTR is -79.74% undervalued if valued using industry average P/E ratio
Share value as per dividend discount (DDM) model: $76.19
Present value of the expected future dividends only: $37.18
P/S (Price to Sales ratio):
2.4
Price to sales ratio is -20.05% below the industry mean
P/B (Price to book value ratio):
3.01
Price to free cash flow: 29.31
-
Net income growth rate (3Y):
104.82%
Net income growth rate is -429.11% lower than the industry average net income growth rate
Dividend Analysis
Dividend payout rate: 7.87%
Dividend yeild: 2.12%
Previous Dividend: $0.41
Previous adjusted dividend: $0.41
Previous Dividend: $1.60
Expected next dividend best case: $0.43
Expected next dividend worst case: $0.40
Average dividend payment (long-term): $0.38
Average dividend increase/decrease (growth rate) % per period: 1.68%
Expected next dividend payment date: 09/08/2022
Expected next dividend record date: 08/11/2022
Expected next dividend declaration date: 08/01/2022
Previous dividend payment date: 06/10/2022
Previous dividend record date: 13/05/2022
Previous dividend declaration date: 05/02/2022
Dividend History:
2022-05-12--$0.41
2021-11-12--$0.39
2021-05-13--$0.39
2022-02-14--$0.41
2021-08-12--$0.39
2021-02-11--$0.39
Dividend growth rate is -44.01% lower than the industry average
In-depth Debt & Leverage Analysis
Debt to equity ratio:
70.10%
Net debt to equity ratio:
82.17%
Debt to assets ratio:
26.29%
Net debt to assets ratio:
30.82%
Debt-to-asset ratio is -60.52% below industry average
Ability to repay debt:
Interest coverage ratio:
10.64
Interest coverage ratio is 245.62% more than industry average
Looking forward:
Debt growth rate:
1.14%
Annual debt growth is -99% lower than industry average debt growth rate
Debt repayment rate in last quarter: 0.00%
Analysis of Key Statistics
Correlation of price movement with the market:
0.548
Statistical significance of correlation:
OTTR has a statistically significant correlation with the market
Average Correlation of the industry with the market:
0.609
Stock price is -10.06% less correlated with the market compared to the industry average correlation
R Squared (percentage of price movement explained by movement of the market):
0.609
Correlation of price movement with Nasdaq (^IXIC):
0.039
Covariance of price movement with the market:
0.057
Kurtosis
26.205
Returns have severe fat-tails (leptokurtic), i.e., returns considerably higher or lower than the mean returns are considerably more likely, compared to assets with normally distributed returns
Skewness of returns:
0.132
Returns are, approximately, symmetrical
Fundamental Analysis & Dupont Analysis of
OTTR
Gross Profit Margin Ratio:
147%
Operating Profit Margin Ratio:
23.19%
Operating profit margin is 230.22% higher than the industry
Net Profit Margin Ratio:
147%
Effective Tax Rate:
18.15%
Effective tax rate is -43.78% lower than the industry
Dupont Method
Net Profit Margin
Return on Equity Ratio (ROE):
×
ROA
=
×
20.86%
Return on equity (ROE) is 161.53% higher than the industry
Financial Leverage
Asset Turnover Ratio (ROA):
7.82%
Return on assets (ROA) is 265.03% higher than the industry
Financial Leverage:
1.4x
Current Ratio:
1.08
Current ratio is -73.85% below industry average
Cash Conversion Cycle (days):
1.1
Cash conversion cycle is -98.57% below industry average
The remaining useful life of property plant & equipment is: 5.0 years
Stock based compensation to net income ratio:
2.24%
In-depth Efficiency Analysis
Revenue generated per employee:
526.8K
Each employee generates -41% less revenue than industry average revenue per employee
EBITDA generated per employee:
159.6K
Each employee generates -25% less EBITDA than industry average revenue per employee
Profit generated per employee:
87.8K
Each employee generates 81% more net income/profit than industry average revenue per employee
Free cash flow (FCF) generated per employee:
6.7K
Each employee generates -141% less free cash flow than industry average revenue per employee
Assets/Capital per employee
960.7K
Each employee generates -141% less free cash flow than industry average revenue per employee
Research & Development (R&D) Analysis
-
-
Competitors/Peer firms of
OTTR
MIDDLESEX WATER COMPANY (XNAS:MSEX)
MGE ENERGY, INC. (XNAS:MGEE)
THE YORK WATER COMPANY (XNAS:YORW)
SPKEP
ARTESIAN RESOURCES CORPORATION (XNAS:ARTNA)
GLOBAL WATER RESOURCES, INC. (XNAS:GWRS)
SPKE
IPLDP
Pure Cycle Corporation (XNAS:PCYO)
Current Analyst Ratings
Strong buy�4%
Buy�0%
Hold�8%
Sell�0%
Strong sell�0%
Overall analyst sentiment is: Hold
Income Statement
Period:
TTM
Date:
3/31/22
Revenue:
1.31B
Cost of Revenue:
Gross Profit:
R&D Expense
General & Admin Expenses:
Selling, General & Admin Expenses
Sales and Marketing Expenses
Other Expenses :
Operating Expenses :
Cost & Expenses :
Interest Income:
Interest Expenses:
Depreciation & Amortization:
EBITDA:
Operating Income:
Other Income Expenses:
Income Before Tax:
Income Tax Expense:
Net Income:
Balance Sheet
Date:
Calendar Year:
Period:
Cash & Cash Equivalents:
Short Term Investments:
Cash & Short Term Investments:
Net Receivables:
Inventory:
Other Current Assets:
Total Current Assets:
PP&E:
Goodwill:
Intangible Assets:
Long Term Investments:
Tax Assets:
Other Non-Current Assets:
Total Non-Current Assets:
Other Assets:
Total Assets:
Accounts Payable:
Short Term Debt:
Tax Payables:
Deferred Revenue:
Other Current Liabilities:
Total Current Liabilities:
Long Term Debt:
Other Non-Current Liabilities:
Total Non Current Liabilities:
Other Liabilities:
Total Liabilities:
Common Stock:
Retained Earnings:
Accumulated Other Comprehensive Loss:
Other Total Stockholders' Equity:
Total Stockholders' Equity:
Total Liabilities and Stockholders' Equity:
Total Investments:
Total Debt:
Net Debt:
826.82M
483.22M
-
-
-
-
179.41M
179.41M
-
37.32M
92.78M
396.98M
303.81M
218.44M
266.88M
48.43M
218.44M
Statement of Cash Flow
Date:
Period:
23.55M
Differed Income Tax :
14.16M
Stock Based Compensation :
4.90M
Change in Working Capital :
- 49801.00K
Accounts Receivables:
-
Other Working Capital:
122.00K
Other Non-Cash Items:
- 19394.00K
Net Cash Provided by Operating Activities:
45.42M
Investments in PP&E:
-
Net Acquisitions:
-
Purchases of Investments:
- 3617.00K
Sales/Maturities of Investments:
Other Investing Activities:
Net Cash Used for Investing Activities:
Debt Repayment:
Common Stock Issued:
Common Stock Repurchased:
Dividend Paid:
Other Financing Activities:
Net Cash Used Provided by Financing Activities:
Effect of FOREX on Changes in Cash:
Net Changes in Cash:
Cash at End of Period:
Cash at Beginning of Period:
Operating Cash Flow:
Capital Expenditure:
Free Cash Flow (FCF):
3/31/22
2022
Q1
1.37M
-
1.37M
218.90M
145.86M
36.27M
402.39M
2.13B
37.57M
8.77M
57.89M
-
156.77M
2.39B
-
2.79B
119.02M
127.76M
21.88M
-
126.37M
373.16M
734.07M
417.02M
1.37B
-
1.74B
208.03M
424.61M
- 6945.0K
-
March 31, 2022 at 6:00:00 AM
1.01B
1.05B
2.79B
-
861.83M
860.5M
-
- 27832.00K
- 31449.00K
-
-
- 2942.00K
- 17181.00K
5.99M
- 14133.00K
-
- 166.00K
1.37M
1.54M
45.42M
- 28710.00K
16.71M
Our Proprietary Portfolio Rating
Our Rating:
B
Price Forecast/Expected Price in Next 5 Years of
OTTR
2023
2024
2025
2026
2027
$78.20
$135.29
$139.16
$143.14
$147.24