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Otter Tail (OTTR) Rewards Shareholders With 6.9% Dividend Hike
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Otter Tail Corporation (OTTR - Free Report) has announced that its board of directors approved a 6.9% increase in the quarterly dividend rate. The revised dividend amount will be 46.75 cents per share. The company’s new annualized dividend rate is $1.87 and the current dividend yield is 2.02%, better than Zacks S&P 500 Composite’s average of 1.61%.
OTTR has been paying dividends to its shareholders since 1938. Courtesy of its stable performance, its management has been increasing the annual dividend rate over the past few years.
Can it Sustain Dividend Hikes?
Otter Tail’s capital investment plan, renewable and natural gas assets, transmission and distribution lines enable it to efficiently meet increasing demand from its growing customer base, which is expected to drive its performance.
Otter Tail also benefits from its two-platform business operations. Attractive rate-base growth in its Electric platform and long-term growth potential in its Manufacturing platform will continue to drive the company’s performance.
OTTR makes consistent investments to upgrade and maintain its existing infrastructure to provide 24x7 reliable services to its customer base. The company plans to invest $1.1 billion in the 2023-2027 period to further strengthen its operations. Nearly 39% of planned expenditures will be utilized to add renewable and natural gas assets to its portfolio and another 42% will be used to add and upgrade electric transmission and distribution lines.
OTTR also utilizes much less debt compared with its peers to run its operation. Low debt trims interest expenses and boosts a company’s margin.
The abovementioned factors will enable OTTR to perform steadily and generate additional funds for payment and an increase in dividends.
Utilities Continue to Reward Shareholders
Domestic-focused, rate-regulated utilities are stable performers, allowing them to reward shareholders through dividend hikes and share buybacks. UGI Corporation (UGI - Free Report) , Atmos Energy Corporation (ATO - Free Report) and Southern Company (SO - Free Report) have raised dividend rates during 2023.
The utilities mentioned above have raised annual dividend rates for more than the past two decades.
The current dividend yields of UGI, Atmos Energy and Southern Company are 6.1%, 2.8% and 4.08%, respectively, better than the Zacks S&P 500 Composite’s yield of 1.61%.
Price Movement
In the past six months, OTTR’s shares have returned 1.4% against its industry’s 9.4% decline.
Image: Bigstock
Otter Tail (OTTR) Rewards Shareholders With 6.9% Dividend Hike
Otter Tail Corporation (OTTR - Free Report) has announced that its board of directors approved a 6.9% increase in the quarterly dividend rate. The revised dividend amount will be 46.75 cents per share. The company’s new annualized dividend rate is $1.87 and the current dividend yield is 2.02%, better than Zacks S&P 500 Composite’s average of 1.61%.
OTTR has been paying dividends to its shareholders since 1938. Courtesy of its stable performance, its management has been increasing the annual dividend rate over the past few years.
Can it Sustain Dividend Hikes?
Otter Tail’s capital investment plan, renewable and natural gas assets, transmission and distribution lines enable it to efficiently meet increasing demand from its growing customer base, which is expected to drive its performance.
Otter Tail also benefits from its two-platform business operations. Attractive rate-base growth in its Electric platform and long-term growth potential in its Manufacturing platform will continue to drive the company’s performance.
OTTR makes consistent investments to upgrade and maintain its existing infrastructure to provide 24x7 reliable services to its customer base. The company plans to invest $1.1 billion in the 2023-2027 period to further strengthen its operations. Nearly 39% of planned expenditures will be utilized to add renewable and natural gas assets to its portfolio and another 42% will be used to add and upgrade electric transmission and distribution lines.
OTTR also utilizes much less debt compared with its peers to run its operation. Low debt trims interest expenses and boosts a company’s margin.
The abovementioned factors will enable OTTR to perform steadily and generate additional funds for payment and an increase in dividends.
Utilities Continue to Reward Shareholders
Domestic-focused, rate-regulated utilities are stable performers, allowing them to reward shareholders through dividend hikes and share buybacks. UGI Corporation (UGI - Free Report) , Atmos Energy Corporation (ATO - Free Report) and Southern Company (SO - Free Report) have raised dividend rates during 2023.
The utilities mentioned above have raised annual dividend rates for more than the past two decades.
The current dividend yields of UGI, Atmos Energy and Southern Company are 6.1%, 2.8% and 4.08%, respectively, better than the Zacks S&P 500 Composite’s yield of 1.61%.
Price Movement
In the past six months, OTTR’s shares have returned 1.4% against its industry’s 9.4% decline.
Image Source: Zacks Investment Research
Zacks Rank
Otter Tail currently has a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.