Financial Comparison: Otter Tail (NASDAQ:OTTR) vs. Exelon (NASDAQ:EXC)

Exelon (NASDAQ:EXC) and Otter Tail (NASDAQ:OTTR) are both utilities companies, but which is the better business? We will contrast the two companies based on the strength of their analyst recommendations, institutional ownership, earnings, dividends, risk, valuation and profitability.

Institutional and Insider Ownership

80.9% of Exelon shares are held by institutional investors. Comparatively, 61.3% of Otter Tail shares are held by institutional investors. 0.1% of Exelon shares are held by company insiders. Comparatively, 1.9% of Otter Tail shares are held by company insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a stock will outperform the market over the long term.

Dividends

Exelon pays an annual dividend of $1.60 per share and has a dividend yield of 3.7%. Otter Tail pays an annual dividend of $2.10 per share and has a dividend yield of 2.5%. Exelon pays out 60.8% of its earnings in the form of a dividend. Otter Tail pays out 30.9% 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. Exelon has raised its dividend for 3 consecutive years and Otter Tail has raised its dividend for 12 consecutive years.

Volatility and Risk

Exelon has a beta of 0.41, meaning that its share price is 59% less volatile than the S&P 500. Comparatively, Otter Tail has a beta of 0.57, meaning that its share price is 43% less volatile than the S&P 500.

Earnings & Valuation

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

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Exelon	$23.03 billion	1.90	$2.46 billion	$2.63	16.49
Otter Tail	$1.31 billion	2.66	$301.66 million	$6.80	12.22

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

Profitability

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

	Net Margins	Return on Equity	Return on Assets
Exelon	11.16%	9.85%	2.47%
Otter Tail	21.82%	16.85%	7.80%

Analyst Recommendations

This is a summary of recent recommendations and price targets for Exelon and Otter Tail, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Exelon	1	4	5	0	2.40
Otter Tail	0	0	1	0	3.00

Exelon currently has a consensus price target of $47.20, suggesting a potential upside of 8.81%. Otter Tail has a consensus price target of $83.00, suggesting a potential downside of 0.13%. Given Exelon’s higher probable upside, equities research analysts plainly believe Exelon is more favorable than Otter Tail.

Summary

Otter Tail beats Exelon on 10 of the 17 factors compared between the two stocks.

About Exelon

Exelon Corporation, a utility services holding company, engages in the energy distribution and transmission businesses in the United States and Canada. The company is involved in the purchase and regulated retail sale of electricity and natural gas, transmission and distribution of electricity, and distribution of natural gas to retail customers. It also offers support services, including legal, human resources, information technology, supply management, financial, engineering, customer operations, transmission and distribution planning, asset management, system operations, and power procurement services. It serves distribution utilities, municipalities, and financial institutions, as well as commercial, industrial, governmental, and residential customers. Exelon Corporation was incorporated in 1999 and is headquartered in Chicago, Illinois.

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.