Otter Tail Corporation Boosts Dividend by 12 Percent: A Win for Shareholders

Otter Tail Corporation (OTTR) has announced a significant increase in its quarterly dividend, raising it by 12.3 percent to $0.525 per share. This move reflects the company's strong financial position and commitment to delivering shareholder value. The new annual indicated dividend rate is $2.10 per share, a $0.23 increase over the 2024 rate. This double-digit increase is a testament to Otter Tail's commitment to its shareholders and its ability to generate stable cash flows from its diversified operations.

Otter Tail Corporation's decision to increase its dividend is a clear indication of its confidence in its future prospects and its commitment to returning value to shareholders. The company's CEO, Chuck MacFarlane, stated that the double-digit increase to the dividend reflects Otter Tail's commitment to delivering shareholder value. This commitment is a key aspect of the company's long-term growth strategy, which focuses on creating value for its shareholders through consistent dividend payments and growth.

The company's strong financial performance in recent years has supported this significant dividend increase. Otter Tail Corporation's earnings per share (EPS) have been growing consistently, with a compound annual growth rate (CAGR) of approximately 5 to 7 percent over the long term. This growth is driven by a diversified business model that includes an electric utility and manufacturing businesses, with the Electric segment contributing about 65 percent of earnings and the Manufacturing and Plastics segments contributing the remaining 35 percent.

In 2023, Otter Tail Corporation's revenue was $1.35 billion, a decrease of -7.60% compared to the previous year's $1.46 billion. However, earnings were $294.19 million, an increase of 3.52%. This demonstrates the company's ability to maintain profitability despite a slight decrease in revenue. The company's strong financial position is also evident in its cash flow, with consolidated cash provided by operating activities reaching a record $404.5 million in 2023, compared to $389.3 million in 2022.

The company's commitment to reinvesting in its businesses has also contributed to its financial success. In 2023, Otter Tail Power completed the purchase of Ashtabula III, a 62 MW wind facility, and placed Hoot Lake Solar, a 49 MW solar facility, into service. Expansion projects were also underway for both BTD Manufacturing and Vinyltech to add capacity and support future growth opportunities.

Looking ahead, investors can expect Otter Tail Corporation to continue its focus on growing its business and achieving operational, commercial, and talent excellence to strengthen its position in the markets it serves. The company's long-term earnings per share growth rate target of 5 to 7 percent is expected to be maintained, with the annual dividend increase approximating this target. The company's diversified business model, strong financial position, and commitment to reinvesting in its businesses position it well to continue delivering shareholder value in the future.



In conclusion, Otter Tail Corporation's decision to increase its quarterly dividend by 12 percent is a clear indication of the company's strong financial position and commitment to delivering shareholder value. The company's diversified business model, consistent earnings growth, and commitment to reinvesting in its businesses position it well to continue delivering shareholder value in the future. Investors seeking stable income and capital appreciation should consider Otter Tail Corporation as an attractive option in the utilities sector.