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5-Star Stocks Poised to Pop: Otter Tail

By Brian D. Pacampara, CFA - Updated Apr 5, 2017 at 7:53PM

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Market-trouncing returns could be written in this 5-Star.

Based on the aggregated intelligence of 125,000-plus investors participating in Motley Fool CAPS, the Fool's free investing community, diversified holdings company Otter Tail (NASDAQ:OTTR) has earned a coveted five-star ranking. Our data has shown that five-star stocks outperform the market by a significant margin; conversely, one-star stocks woefully lag the market average.

With that in mind, let's take a closer look at Otter Tail's business, and see what CAPS investors are saying about the stock right now.

Otter Tail facts

Headquarters (founded)

Fergus Falls, Minn. (1907)

Market Cap

$816.66 million

Industry

Industrial Conglomerates

TTM Revenue

$1.31 billion

Management

CEO John Erickson (since 2002)
CFO Kevin Moug (since 2001)

Business Segments

Electric, Plastics, Manufacturing, Health Services, Food Ingredient Processing

Return on Equity (average, last three years)

8.8%

Dividend Yield

5.2%

Competitors

ALLETE (NYSE:ALE),
Alliance Imaging (NYSE:AIQ)

CAPS members bullish on OTTR also bullish on:

General Electric (NYSE:GE),
Apple (NASDAQ:AAPL)

CAPS members bearish on OTTR also bearish on:

Brookfield Asset Management (NYSE:BAM),
ExxonMobil (NYSE:XOM)

Sources: Capital IQ (a division of Standard & Poor's), and Motley Fool CAPS. TTM=trailing 12 months.

Over on CAPS, 800 of the 820 members who have rated Otter Tail -- or 98% -- believe the stock will outperform the S&P 500 going forward. These bulls include band42 and Aggiemedic01, both of whom are ranked in the top 25% of our community.

Earlier this month, band42 summed up the bull case in simple terms: "Conservative management, constant dividend, wind power, it adds up to growth with a margin of safety ... "

In a pitch from last month, Aggiemedic01 agrees, highlighting the wind-based tailwind beneath Otter Tail's wings:

Increasing return from its investment in wind power will begin to pan out next year, offsetting weakness in other areas of business. As the economy recovers (in the unknown, distant future), other areas will pick up and their wind based segments will continue to grow.

What do you think about Otter Tail, or any other stock for that matter? Make your voice heard on Motley Fool CAPS today. More than 125,000 investors are waiting to hear what you have to say. CAPS is 100% free, so simply click here to get started.

On Jan. 12, 2009, Fool co-founder David Gardner, Jeff Fischer, and their Motley Fool Pro team will accept new subscribers to their real-money portfolio service. Motley Fool Pro is investing $1 million of the Fool's own money in long and short positions in a range of securities, including common stocks, put and call options, and exchange-traded funds (ETFs). They also incorporate proprietary CAPS "community intelligence" data into their research. To learn more about Motley Fool Pro and to receive a private invitation to join, simply enter your email address in the box below.

Fool contributor Brian Pacampara owns no position in any of the companies mentioned. Otter Tail is a Motley Fool Hidden Gems pick, Apple is a Stock Advisor selection, and Brookfield is a choice of Global Gains. The Fool's disclosure policy always gets a perfect score.

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Stocks Mentioned

Otter Tail Corporation Stock Quote
Otter Tail Corporation
OTTR
$79.85 (-0.17%) $0.14
Apple Inc. Stock Quote
Apple Inc.
AAPL
$168.49 (-0.44%) $0.75
Exxon Mobil Corporation Stock Quote
Exxon Mobil Corporation
XOM
$93.19 (2.89%) $2.62
General Electric Company Stock Quote
General Electric Company
GE
$78.90 (2.28%) $1.76
Brookfield Asset Management Inc. Stock Quote
Brookfield Asset Management Inc.
BAM
$53.56 (1.11%) $0.59
Global X Funds - Global X Future Analytics Tech ETF Stock Quote
Global X Funds - Global X Future Analytics Tech ETF
AIQ
$23.40 (0.09%) $0.02
ALLETE, Inc. Stock Quote
ALLETE, Inc.
ALE
$62.18 (-0.59%) $0.37

*Average returns of all recommendations since inception. Cost basis and return based on previous market day close.

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