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Otter Tail Corporation (OTTR)

Company Dividend Discount ModelIndustry: Diversified UtilitiesSector: Utilities

Valuation Snapshot

Stable Growth$137.49 - $320.09$201.59
Multi-Stage$105.30 - $115.05$110.09
Blended Fair Value$155.84
Current Price$81.97
Upside90.12%
DecisionBuy

Dividend History & Growth Metrics (10Y)

Metric5Y CAGR10Y CAGR2024202320222021202020192018201720162015
DPS7.03%5.87%1.861.741.631.541.431.321.261.201.151.10
YoY Growth--7.12%6.26%6.00%7.54%8.24%4.75%5.07%4.95%4.37%4.43%
Dividend Yield--2.31%2.02%2.26%2.47%3.10%2.98%2.55%2.77%3.02%3.71%

Stable Growth Model (Adjusted)

(USD in Millions except Per Share Data)
Net Income To Common (M)278.97
(-) Cash Dividends Paid (M)85.62
(=) Cash Retained (M)193.35
MetricLOWBASEHIGH
Required Retention Ratio20.0%12.5%7.5%
(=) Cash Required (M)55.7934.8720.92
Cash Retained (M)193.35193.35193.35
(-) Cash Required (M)-55.79-34.87-20.92
(=) Excess Retained (M)137.56158.48172.43
(/) Shares Outstanding (M)42.1042.1042.10
(=) Excess Retained per Share3.273.764.10
LTM Dividend per Share2.032.032.03
(+) Excess Retained per Share3.273.764.10
(=) Adjusted Dividend5.305.806.13
WACC / Discount Rate9.08%9.08%9.08%
Growth Rate5.03%6.03%7.03%
Fair Value$137.49$201.59$320.09
Upside / Downside67.73%145.93%290.49%

Multi-Stage Model: Projections

(USD in Millions)
MetricTTMDec-27Dec-28Dec-29Dec-30Dec-31Terminal
Net Income (M)278.97295.79313.63332.54352.60373.86385.08
Payout Ratio30.69%42.55%54.41%66.28%78.14%90.00%92.50%
Projected Dividends (M)85.62125.87170.66220.40275.51336.48356.20

Multi-Stage Valuation

MetricLOWBASEHIGH
WACC / Discount Rate9.08%9.08%9.08%
Growth Rate5.03%6.03%7.03%
Year 1 PV (M)114.30115.39116.48
Year 2 PV (M)140.74143.43146.15
Year 3 PV (M)165.05169.81174.66
Year 4 PV (M)187.37194.61202.05
Year 5 PV (M)207.80217.89228.36
PV of Terminal Value (M)3,618.133,793.683,975.98
Equity Value (M)4,433.394,634.814,843.68
Shares Outstanding (M)42.1042.1042.10
Fair Value$105.30$110.09$115.05
Upside / Downside28.46%34.30%40.35%

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