TacticScaleWhat Otter Tail Does & How It Makes Money (OTTR)
Updated October 2026 · reflects Otter Tail's latest reported financials
Midwest electric utility with manufacturing and PVC pipe businesses. It earns regulated revenue by selling electricity to residential, commercial and industrial customers and by taking part in MISO wholesale power markets.
How Otter Tail makes money
It earns regulated revenue by selling electricity to residential, commercial and industrial customers and by taking part in MISO wholesale power markets. Its other income comes from selling fabricated metal parts, plastic products and PVC pipe, mostly to U.S. industrial and municipal customers.
What Otter Tail does
Otter Tail Corporation is a diversified company based in Fergus Falls, Minnesota, founded in 1907. It has three segments. The Electric segment generates, buys, transmits and sells power in Minnesota, North Dakota and South Dakota, and participates in the Midcontinent Independent System Operator (MISO) markets. It produces power from coal, natural gas, fuel oil, wind and solar. The Manufacturing segment provides metal fabrication and thermoformed plastic products for agriculture, construction, horticulture, industrial, lawn and garden, and recreational vehicle markets, with plants in Georgia, Illinois and Minnesota. The Plastics segment makes PVC pipe for municipal and rural water, wastewater, storm drainage and water reclamation systems. It sells through independent sales representatives and its own sales staff. Together, the segments pair a steady regulated utility with manufacturing businesses that rise and fall with the economy.
Products & services
- Retail electricity generation and distribution
- Electric transmission and MISO market participation
- Custom metal fabrication and machine parts
- Thermoformed plastic products
- PVC pipe for municipal and rural water, wastewater and storm drainage
What is Otter Tail worth?
On an owner-earnings DCF, Otter Tail's most-likely value is about $28 versus a recent price near $87 (68% above fair value). But TacticScale only calls a stock undervalued when the price sits below its conservative no-growth floor (~$18) with a margin of safety — so the honest verdict here is “Stretched — richly priced.” Fair value earns its keep only at the extremes, not in the wide middle.
Today's $87 is above even the optimistic Bull case ($35) — the market expects faster, longer growth than modeled here. Expensive unless that extra growth actually shows up.
⚠ High leverage — net debt is 8.0× annual cash flow. Net debt is subtracted from this fair value, but refinancing at higher rates, principal timing, and share dilution aren’t modeled — the equity can be worth far less if cash flow weakens.
Analysis, not advice. Fair value is a margin-of-safety estimate from a deterministic owner-earnings DCF, not a price target or recommendation. See the full breakdown →
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