Otter Tail Corporation Common Stock (OTTR)

FairStock Score: 58/100 — STEADY

Key Financials

Strengths

• Solid return on equity of 15.6% above cost of capital
• Attractive 2.5% dividend yield providing steady income returns

Concerns

• Altman Z-Score of 1.7 places it in the financial distress zone—elevated bankruptcy risk

AI Analysis

Otter Tail Corporation Common Stock is a small-cap industrials company valued at $3.7 billion. The business generates $1.3 billion in annual revenue with a 4.0% net margin. From a quality standpoint, Otter shows distressed Altman Z-Score of 1.7 warrants caution and adequate 16% ROE. On valuation, the stock is attractively valued at 13.5x earnings, with trades above its Graham Number with a negative 8% margin. Growth dynamics show revenue growing at 1.6% and profit growth of -5.6%. The 2.5% dividend yield adds an income component for patient holders. Our composite FairStock Score of 58/100 reflects mixed fundamentals overall. This combination of reasonable valuation, solid returns, and conservative leverage makes it worth a closer look for value-oriented portfolios.

Bull Case

The market underappreciates Otter's consistent 16% ROE at just 14x earnings—a re-rating toward sector peers could unlock 30-50% upside. Operational leverage in the business model means incremental revenue growth could disproportionately boost bottom-line profitability.

Bear Case

Macro headwinds or sector-specific disruption could pressure margins, particularly if competitive intensity increases in the industrials space. Regulatory changes, input cost inflation, or demand normalization represent underappreciated risks that could materially impact forward estimates.

Data from SEC filings. AI analysis is for educational purposes only — not investment advice. Scoring methodology · Disclaimer