Critical Comparison: Otter Tail (NASDAQ:OTTR) & Terna Rete Elettrica Nazionale (OTCMKTS:TEZNY)

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

Dividends

Terna Rete Elettrica Nazionale pays an annual dividend of $1.25 per share and has a dividend yield of 3.7%. Otter Tail pays an annual dividend of $2.31 per share and has a dividend yield of 2.4%. Otter Tail pays out 49.8% of its earnings in the form of a dividend. Otter Tail has raised its dividend for 12 consecutive years.

Volatility & Risk

Terna Rete Elettrica Nazionale has a beta of 0.65, indicating that its share price is 35% less volatile than the S&P 500. Comparatively, Otter Tail has a beta of 0.45, indicating that its share price is 55% less volatile than the S&P 500.

Earnings and Valuation

This table compares Terna Rete Elettrica Nazionale and Otter Tail”s revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Terna Rete Elettrica Nazionale	$3.98 billion	5.74	$1.15 billion	N/A	N/A
Otter Tail	$1.30 billion	3.07	$275.89 million	$4.64	20.53

Terna Rete Elettrica Nazionale has higher revenue and earnings than Otter Tail.

Profitability

This table compares Terna Rete Elettrica Nazionale and Otter Tail’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Terna Rete Elettrica Nazionale	N/A	N/A	N/A
Otter Tail	14.83%	14.56%	6.70%

Insider and Institutional Ownership

61.3% of Otter Tail shares are held by institutional investors. 2.0% of Otter Tail shares are held by insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a company is poised for long-term growth.

Analyst Recommendations

This is a breakdown of current recommendations for Terna Rete Elettrica Nazionale and Otter Tail, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Terna Rete Elettrica Nazionale	0	1	0	0	2.00
Otter Tail	1	4	0	0	1.80

Otter Tail has a consensus price target of $86.00, suggesting a potential downside of 9.71%. Given Otter Tail’s higher possible upside, analysts clearly believe Otter Tail is more favorable than Terna Rete Elettrica Nazionale.

About Terna Rete Elettrica Nazionale

Terna S.p.A., together with its subsidiaries, provides electricity transmission and dispatching services in Italy, other Euro-area countries, and internationally. It operates through Regulated, Non-Regulated, and International segments. The company is involved in the design, construction, management, development, operation, and maintenance of national transmission grid; dispatching and metering; and construction of storage systems. It also supplies transformers and cables; provides energy and connectivity services; and installs and operates interconnecting lines. In addition, the company designs, produces, commercializes, and repairs power transformers for electricity transmission and distribution grids; industrial transformers for the steel and metals industries; special transformers for convertors used in electrochemical production; produces and sells marine and terrestrial cables; develops renewable energy projects; and undertakes private interconnector projects. Terna S.p.A. was founded in 1962 and is based in Rome, Italy.

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.