• In early January 2026, Otter Tail Corporation’s Board of Directors approved a 10% increase in the quarterly common stock dividend to $0.5775 per share, lifting the annual indicated dividend to $2.31 and marking the 88th consecutive year of dividend payments.
• This latest hike, the second straight year of double-digit dividend growth, underscores the company’s long-running emphasis on consistent cash returns alongside its mix of regulated utility, manufacturing, and plastics operations.
• We’ll now consider how this double-digit dividend increase shapes Otter Tail’s existing investment narrative, particularly around cash flow resilience.

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Otter Tail Investment Narrative Recap

To own Otter Tail, you need to be comfortable with a regulated utility anchored by long-lived assets, supported by complementary manufacturing and plastics cash flows. The 10% dividend increase reinforces the income story but does not materially alter the key near term swing factor, which remains how reliably those diversified operations can support cash generation if earnings, as currently forecast, trend lower. The biggest risk is that dividend commitments outpace underlying free cash flow, tightening financial flexibility.

The most relevant recent update alongside this dividend move is the company’s raised 2025 EPS guidance to US$6.32 to US$6.62 per share. That higher earnings range helps frame the dividend hike in the context of what management currently expects the business to generate, but it also sharpens attention on whether future earnings volatility in the manufacturing and plastics segments could pressure payout sustainability if conditions soften.

Yet even with this long dividend record, investors should be aware that...

Otter Tail's narrative projects $1.4 billion revenue and $195.9 million earnings by 2028. This requires 2.5% yearly revenue growth and a $90.3 million earnings decrease from $286.2 million today.

Uncover how Otter Tail's forecasts yield a $83.00 fair value, a 3% downside to its current price.

Exploring Other Perspectives

Four members of the Simply Wall St Community currently place Otter Tail’s fair value anywhere between about US$1.24 and US$83 per share, highlighting very different return expectations. Set against the projected earnings decline, this spread of opinions can help you weigh how much of the dividend story you believe is already reflected in today’s price.

Explore 4 other fair value estimates on Otter Tail - why the stock might be worth less than half the current price!

Build Your Own Otter Tail Narrative

Disagree with existing narratives? Create your own in under 3 minutes - extraordinary investment returns rarely come from following the herd.

• A great starting point for your Otter Tail research is our analysis highlighting 1 key reward and 2 important warning signs that could impact your investment decision.
• Our free Otter Tail research report provides a comprehensive fundamental analysis summarized in a single visual - the Snowflake - making it easy to evaluate Otter Tail's overall financial health at a glance.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.