OTTER TAIL CORP (NASDAQ:OTTR) Matches Key Peter Lynch Investment Criteria

Investors looking for long-term growth possibilities at fair prices frequently use established methods that mix development possibility with careful financial practices. One method comes from famous investor Peter Lynch, whose system centers on finding firms with lasting earnings increases, good financial condition, and fair prices. This system highlights basic examination instead of market prediction, looking for enterprises that show regular profit generation without too much borrowing, all while keeping price measures that do not overvalue future development possibility. The system intentionally stays away from firms with very high growth rates over 30%, preferring instead those with constant, achievable development that can build up over long timeframes.

Matching Peter Lynch Standards

OTTER TAIL CORP (NASDAQ:OTTR) shows various features that match closely with Lynch's investment thinking. The firm's financial numbers display a profile that mixes development, profit generation, and careful financial handling:

• Lasting Development: With a five-year EPS growth figure of 26.89%, OTTER TAIL fits inside Lynch's chosen 15-30% span, showing good but controlled expansion
• Good Price: The PEG figure of 0.48 goes well below Lynch's highest limit of 1.0, indicating the stock could be priced low compared to its development path
• Careful Borrowing: A debt-to-equity figure of 0.59 matches Lynch's need for firms supported more by ownership than loans
• Financial Condition: The current figure of 3.32 goes far above the lowest need of 1.0, showing very good short-term cash availability
• Profit Generation Ability: A return on equity of 16.12% goes above Lynch's 15% limit, showing good use of investor money

These numbers together create an image of a firm developing at a lasting speed while keeping financial order, exactly the kind of enterprise Lynch supported for long-term investment.

Basic Evaluation

The firm's total basic rating of 6 out of 10 shows a varied but mainly good view. OTTER TAIL does very well in profit generation, getting 9 out of 10, with outstanding profit percentages and returns that do better than most industry competitors. The electric utility shows good operational performance with profit percentages of 21.81% and operating percentages of 27.14%, both placed in the highest groups of its industry. Financial condition gets a firm 7 out of 10, helped by very good cash availability numbers that greatly go above industry averages.

Pricing looks fair with a score of 6 out of 10, selling at a P/E figure of 12.96 that places the firm lower priced than 68% of industry competitors and much under S&P 500 averages. However, development represents the firm's least strong area, getting only 3 out of 10, with recent earnings drops and limited expected future income development. The full basic examination report gives more detailed views into these numbers and their meanings for investors.

Business Setup Background

OTTER TAIL's varied activities across electric utilities, production, and plastics supply the kind of clear business setup Lynch liked. The firm's position in necessary services and industrial areas matches his liking for "ordinary" enterprises that create the foundation of the economy. This variety across steady utility activities and industrial production makes several income sources while keeping business simplicity that personal investors can grasp, another Lynch idea stressing investment in what you know.

Investment Points

While OTTER TAIL matches many Lynch standards, investors should notice various elements. The firm's falling recent earnings and limited development expectations differ with its good past performance. However, the low price multiples could already show these issues. The firm's 2.45% dividend return, while not special, gives income part next to development possibility, and its reliable dividend history going over ten years shows dedication to investor payments.

The present market situation, with both short and long-term S&P 500 patterns positive, could supply good circumstances for using such long-term systems. Lynch stressed that market prediction should not guide investment choices, but knowing wider market background can help shape possibility evaluation.

For investors curious about finding more firms that match Peter Lynch's standards, the Peter Lynch Stock Screen supplies regularly refreshed results based on these measures.

Disclaimer: This examination is for information purposes only and does not make up investment guidance, suggestion, or support of any security. Investors should do their own investigation and talk with financial consultants before making investment choices. Past results do not guarantee future outcomes, and all investments carry risk including possible loss of original money.