Hallador Energy (NASDAQ:HNRG – Get Free Report) and Otter Tail (NASDAQ:OTTR – Get Free Report) are both energy companies, but which is the better investment? We will compare the two businesses based on the strength of their dividends, profitability, valuation, analyst recommendations, earnings, risk and institutional ownership.
Profitability
This table compares Hallador Energy and Otter Tail’s net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets | |
| Hallador Energy | -4.85% | -6.71% | -3.39% |
| Otter Tail | 22.67% | 18.96% | 8.62% |
Insider & Institutional Ownership
61.4% of Hallador Energy shares are held by institutional investors. Comparatively, 61.3% of Otter Tail shares are held by institutional investors. 32.3% of Hallador Energy shares are held by insiders. Comparatively, 1.9% of Otter Tail shares are held by insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a stock is poised for long-term growth.
Earnings & Valuation
| Gross Revenue | Price/Sales Ratio | Net Income | Earnings Per Share | Price/Earnings Ratio | |
| Hallador Energy | $404.39 million | 1.51 | $44.79 million | ($5.73) | -2.51 |
| Otter Tail | $1.33 billion | 2.48 | $294.19 million | $7.17 | 11.01 |
Otter Tail has higher revenue and earnings than Hallador Energy. Hallador Energy is trading at a lower price-to-earnings ratio than Otter Tail, indicating that it is currently the more affordable of the two stocks.
Risk and Volatility
Hallador Energy has a beta of 0.18, indicating that its share price is 82% less volatile than the S&P 500. Comparatively, Otter Tail has a beta of 0.49, indicating that its share price is 51% less volatile than the S&P 500.
Dividends
Hallador Energy pays an annual dividend of $0.16 per share and has a dividend yield of 1.1%. Otter Tail pays an annual dividend of $2.10 per share and has a dividend yield of 2.7%. Hallador Energy pays out -2.8% of its earnings in the form of a dividend. Otter Tail pays out 29.3% of its earnings in the form of a dividend. Both companies have healthy payout ratios and should be able to cover their dividend payments with earnings for the next several years. Otter Tail has increased its dividend for 12 consecutive years. Otter Tail is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.
Analyst Ratings
This is a summary of recent ratings for Hallador Energy and Otter Tail, as reported by MarketBeat.com.
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score | |
| Hallador Energy | 0 | 0 | 2 | 0 | 3.00 |
| Otter Tail | 0 | 1 | 0 | 0 | 2.00 |
Hallador Energy presently has a consensus price target of $16.00, suggesting a potential upside of 11.34%. Given Hallador Energy’s stronger consensus rating and higher probable upside, equities research analysts clearly believe Hallador Energy is more favorable than Otter Tail.
Summary
Otter Tail beats Hallador Energy on 11 of the 17 factors compared between the two stocks.
About Hallador Energy
Hallador Energy Company, through its subsidiaries, engages in the production of steam coal in the State of Indiana for the electric power generation industry. The company owns the Oaktown Mine 1 and Oaktown Mine 2 underground mines in Oaktown; Freelandville Center Pit surface mine in Freelandville; and Prosperity Surface mine in Petersburg, Indiana. It is also involved in gas exploration activities in Indiana; and operation of logistics transport facility. Hallador Energy Company was founded in 1949 and is headquartered in Terre Haute, Indiana.
About Otter Tail
Otter Tail Corporation, together with its subsidiaries, engages in electric utility, manufacturing, and plastic pipe businesses in the United States. It operates through three segments: Electric, Manufacturing, and Plastics. The Electric segment produces, transmits, distributes, and sells electric energy in Minnesota, North Dakota, and South Dakota; and operates as a participant in the Midcontinent Independent System Operator markets. This segment generates electricity through coal, fuel oil, solar, wind, and natural gas. It serves approximately residential, commercial, and industrial customers. The Manufacturing segment engages in the contract machining, metal parts stamping, fabrication and painting, production of plastic thermoformed horticultural containers, life science and industrial packaging, and material handling components and extruded raw material stock for the recreational vehicle, lawn and garden, agricultural, construction, and industrial and energy equipment end markets. The Plastics segment manufactures polyvinyl chloride pipes for municipal water, rural water, wastewater, storm drainage and water reclamation system, and other uses for customers in the horticulture, medical and life sciences, industrial, recreation, and electronics industries. This segment markets its products to wholesalers and distributors through independent sales representatives, company salespersons, and customer service representatives. The company was formerly known as Otter Tail Power Company and changed its name to Otter Tail Corporation in 2001. Otter Tail Corporation was founded in 1907 and is headquartered in Fergus Falls, Minnesota.
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