DTB - Otter Tail: Strong Finances Make The Valuation Reasonable

• Otter Tail is one of the more interesting electric utilities, given that only 70% of its earnings come from electricity.
• The company is one of the most renewable-heavy utilities in the industry, and it is expanding significantly in this area.
• The company is growing its rate base at a 7.2% CAGR but unfortunately, EPS growth will probably not be that high.
• The company has incredibly strong financials and is one of the few utilities that can pay its dividend out of FCF.
• The valuation is higher than some of its peers, but the strong finances may make it worthwhile.

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