Reviewing Emera (OTCMKTS:EMRAF) & Otter Tail (NASDAQ:OTTR)

Otter Tail (NASDAQ:OTTR) and Emera (OTCMKTS:EMRAF) are both utilities companies, but which is the superior investment? We will compare the two companies based on the strength of their analyst recommendations, risk, earnings, profitability, institutional ownership, valuation and dividends.

Insider and Institutional Ownership

61.3% of Otter Tail shares are owned by institutional investors. Comparatively, 23.7% of Emera shares are owned by institutional investors. 2.0% of Otter Tail shares are owned by insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a stock will outperform the market over the long term.

Analyst Ratings

This is a breakdown of recent ratings for Otter Tail and Emera, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Otter Tail	1	4	0	0	1.80
Emera	0	0	0	0	0.00

Otter Tail presently has a consensus price target of $86.00, suggesting a potential downside of 4.77%. Given Otter Tail’s stronger consensus rating and higher possible upside, research analysts clearly believe Otter Tail is more favorable than Emera.

Earnings & Valuation

This table compares Otter Tail and Emera”s revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Otter Tail	$1.32 billion	2.88	$275.89 million	$4.64	19.46
Emera	N/A	N/A	N/A	$1.97	23.11

Otter Tail has higher revenue and earnings than Emera. Otter Tail is trading at a lower price-to-earnings ratio than Emera, indicating that it is currently the more affordable of the two stocks.

Dividends

Otter Tail pays an annual dividend of $2.31 per share and has a dividend yield of 2.6%. Emera pays an annual dividend of $1.45 per share and has a dividend yield of 3.2%. Otter Tail pays out 49.8% of its earnings in the form of a dividend. Emera pays out 73.8% 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 12 consecutive years.

Profitability

This table compares Otter Tail and Emera’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Otter Tail	14.83%	14.56%	6.70%
Emera	N/A	N/A	N/A

Summary

Otter Tail beats Emera on 11 of the 13 factors compared between the two stocks.

About Otter Tail

Otter Tail Corporation, together with its subsidiaries, engages in electric utility, manufacturing, and plastic pipe businesses in the United States. It operates through three segments: Electric, Manufacturing, and Plastics. The 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 markets. This segment generates electricity through coal, fuel oil, solar, wind, and natural gas. It serves approximately residential, commercial, and industrial customers. The Manufacturing segment engages in the contract machining, metal parts stamping, fabrication and painting, production of plastic thermoformed horticultural containers, life science and industrial packaging, and material handling components and extruded raw material stock for the recreational vehicle, lawn and garden, agricultural, construction, and industrial and energy equipment end markets. The Plastics segment manufactures polyvinyl chloride pipes for municipal water, rural water, wastewater, storm drainage and water reclamation system, and other uses for customers in the horticulture, medical and life sciences, industrial, recreation, and electronics industries. 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.

About Emera

Emera Incorporated, through its subsidiaries, engages in the generation, transmission, and distribution of electricity to various customers. The company operates through Florida Electric Utility, Canadian Electric Utilities, Other Electric Utilities, Gas Utilities and Infrastructure, and Other segments. It generates electricity through natural gas, solar, hydroelectricity, coal, and biomass power plants. The company is also involved in the purchase, transmission, distribution, and sale of natural gas; and the provision of energy marketing, trading, and other energy asset management services. In addition, it transports re-gasified liquefied natural gas from Saint John, New Brunswick to consumers in the northeastern United States through its 145-kilometer pipeline. As of December 31, 2023, the company’s electric utilities served approximately 840,000 customers in West Central Florida; 549,000 customers in Nova Scotia; 134,000 customers in the island of Barbados; 19,000 customers in the Grand Bahama Island; and gas utilities and infrastructure served approximately 490,000 customers across Florida and 540,000 customers in New Mexico. The company was incorporated in 1998 and is headquartered in Halifax, Canada.