Head to Head Comparison: Otter Tail (OTTR) versus Public Service Enterprise Group (PEG)
Otter Tail (NASDAQ: OTTR) and Public Service Enterprise Group (NYSE:PEG) are both utilities companies, but which is the better investment? We will contrast the two businesses based on the strength of their risk, analyst recommendations, profitability, valuation, institutional ownership, earnings and dividends.
Otter Tail pays an annual dividend of $1.34 per share and has a dividend yield of 3.3%. Public Service Enterprise Group pays an annual dividend of $1.72 per share and has a dividend yield of 3.6%. Otter Tail pays out 72.0% of its earnings in the form of a dividend. Public Service Enterprise Group pays out 105.5% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Public Service Enterprise Group has raised its dividend for 6 consecutive years. Public Service Enterprise Group is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.
42.1% of Otter Tail shares are owned by institutional investors. Comparatively, 67.7% of Public Service Enterprise Group shares are owned by institutional investors. 1.7% of Otter Tail shares are owned by company insiders. Comparatively, 0.6% of Public Service Enterprise Group shares are owned by company insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a stock is poised for long-term growth.
This is a summary of recent ratings for Otter Tail and Public Service Enterprise Group, as provided by MarketBeat.com.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
|Public Service Enterprise Group||0||6||10||0||2.63|
Otter Tail presently has a consensus price target of $44.00, indicating a potential upside of 8.37%. Public Service Enterprise Group has a consensus price target of $50.58, indicating a potential upside of 5.22%. Given Otter Tail’s higher probable upside, research analysts clearly believe Otter Tail is more favorable than Public Service Enterprise Group.
Risk & Volatility
Otter Tail has a beta of 0.74, meaning that its stock price is 26% less volatile than the S&P 500. Comparatively, Public Service Enterprise Group has a beta of 0.46, meaning that its stock price is 54% less volatile than the S&P 500.
This table compares Otter Tail and Public Service Enterprise Group’s net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
|Public Service Enterprise Group||17.33%||11.25%||3.63%|
Valuation & Earnings
This table compares Otter Tail and Public Service Enterprise Group’s 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||1.89||$72.43 million||$1.86||21.83|
|Public Service Enterprise Group||$9.08 billion||2.67||$1.57 billion||$1.63||29.49|
Public Service Enterprise Group has higher revenue and earnings than Otter Tail. Otter Tail is trading at a lower price-to-earnings ratio than Public Service Enterprise Group, indicating that it is currently the more affordable of the two stocks.
Public Service Enterprise Group beats Otter Tail on 11 of the 17 factors compared between the two stocks.
Otter Tail Company Profile
Otter Tail Corporation is a holding company. The Company operates through three segments: Electric, Manufacturing and Plastics. The Electric segment includes the production, transmission, distribution and sale of electric energy in Minnesota, North Dakota and South Dakota by Otter Tail Power Company (OTP). The Manufacturing segment consists of businesses in manufacturing activities, such as contract machining, metal parts stamping, fabrication and painting, and production of material and handling trays and horticultural containers. These businesses have manufacturing facilities in Georgia, Illinois and Minnesota and sell products primarily in the United States. The Plastics segment consists of businesses producing polyvinyl chloride (PVC) pipe at plants in North Dakota and Arizona. The PVC pipe is sold primarily in the upper Midwest and Southwest regions of the United States. The Company’s manufacturing and plastic pipe businesses are owned by its subsidiary, Varistar Corporation.
Public Service Enterprise Group Company Profile
Public Service Enterprise Group Incorporated (PSEG) is a holding company. The Company is an energy company with operations located primarily in the Northeastern and Mid-Atlantic United States. The Company’s segments include Public Service Electric and Gas Company (PSE&G), PSEG Power LLC (Power) and Other. PSEG is engaged in the transmission of electricity and distribution of electricity and natural gas in certain areas of New Jersey. PSE&G is also the provider of last resort for gas and electric commodity service for end users in its service territory. Power is a multi-regional energy supply company that integrates the operations of its merchant nuclear and fossil generating assets with its power marketing businesses through energy sales in energy markets and fuel supply functions primarily in the Northeast and Mid-Atlantic United States through its principal subsidiaries. In addition, Power owns and operates solar generation in various states.
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