NYSE:BKH

Stock Analysis Report

Executive Summary

Black Hills Corporation, through its subsidiaries, operates as an electric and natural gas utility company in the United States.

Rewards

Earnings are forecast to grow 6.45% per year

Pays a high and reliable dividend of 2.72%

Risk Analysis

Interest payments are not well covered by earnings

Shareholders have been diluted in the past year



Snowflake Analysis

Established dividend payer with questionable track record.


Similar Companies

Share Price & News

How has Black Hills's share price performed over time and what events caused price changes?


Latest Share Price and Events

Stable Share Price: BKH has not had significant price volatility in the past 3 months.


Market Performance


7 Day Return

1.8%

BKH

2.1%

US Integrated Utilities

-0.09%

US Market


1 Year Return

27.0%

BKH

22.0%

US Integrated Utilities

23.9%

US Market

Return vs Industry: BKH exceeded the US Integrated Utilities industry which returned 19.5% over the past year.

Return vs Market: BKH exceeded the US Market which returned 24.6% over the past year.


Shareholder returns

BKHIndustryMarket
7 Day1.8%2.1%-0.09%
30 Day6.8%5.0%3.1%
90 Day6.1%3.3%10.4%
1 Year30.6%27.0%26.3%22.0%26.6%23.9%
3 Year44.8%32.4%48.4%33.5%50.9%41.2%
5 Year85.8%59.3%62.0%30.0%78.1%58.5%

Price Volatility Vs. Market

How volatile is Black Hills's share price compared to the market and industry in the last 5 years?


Simply Wall St News

Valuation

Is Black Hills undervalued compared to its fair value and its price relative to the market?

22.64x

Price to Earnings (PE) ratio


Share Price vs. Fair Value

Below Fair Value: BKH ($78.69) is trading above our estimate of fair value ($51.18)

Significantly Below Fair Value: BKH is trading above our estimate of fair value.


Price To Earnings Ratio

PE vs Industry: BKH is poor value based on its PE Ratio (21.6x) compared to the Integrated Utilities industry average (21x).

PE vs Market: BKH is poor value based on its PE Ratio (21.6x) compared to the US market (18.9x).


Price to Earnings Growth Ratio

PEG Ratio: BKH is poor value based on its PEG Ratio (3.3x)


Price to Book Ratio

PB vs Industry: BKH is good value based on its PB Ratio (2.1x) compared to the US Integrated Utilities industry average (2.1x).


Next Steps

Future Growth

How is Black Hills forecast to perform in the next 1 to 3 years based on estimates from 6 analysts?

6.1%

Forecasted annual earnings growth


Earnings and Revenue Growth Forecasts


Analyst Future Growth Forecasts

Earnings vs Savings Rate: BKH's forecast earnings growth (6.4% per year) is above the savings rate (1.7%).

Earnings vs Market: BKH's earnings (6.4% per year) are forecast to grow slower than the US market (14.3% per year).

High Growth Earnings: BKH's earnings are forecast to grow, but not significantly.

Revenue vs Market: BKH's revenue (3.8% per year) is forecast to grow slower than the US market (7.5% per year).

High Growth Revenue: BKH's revenue (3.8% per year) is forecast to grow slower than 20% per year.


Earnings per Share Growth Forecasts


Future Return on Equity

Future ROE: BKH's Return on Equity is forecast to be low in 3 years time (9.3%).


Next Steps

Past Performance

How has Black Hills performed over the past 5 years?

27.5%

Historical annual earnings growth


Earnings and Revenue History

Quality Earnings: BKH has high quality earnings.

Growing Profit Margin: BKH's current net profit margins (12.4%) are lower than last year (14.2%).


Past Earnings Growth Analysis

Earnings Trend: BKH's earnings have grown significantly by 27.5% per year over the past 5 years.

Accelerating Growth: BKH's has had negative earnings growth over the past year, so it can't be compared to its 5-year average.

Earnings vs Industry: BKH had negative earnings growth (-9.8%) over the past year, making it difficult to compare to the Integrated Utilities industry average (-9.8%).


Return on Equity

High ROE: BKH's Return on Equity (9.5%) is considered low.


Return on Assets


Return on Capital Employed


Next Steps

Financial Health

How is Black Hills's financial position?


Financial Position Analysis

Short Term Liabilities: BKH's short term assets ($377.4M) do not cover its short term liabilities ($691.1M).

Long Term Liabilities: BKH's short term assets ($377.4M) do not cover its long term liabilities ($4.2B).


Debt to Equity History and Analysis

Debt Level: BKH's debt to equity ratio (137.7%) is considered high.

Reducing Debt: BKH's debt to equity ratio has increased from 115.9% to 137.7% over the past 5 years.

Debt Coverage: BKH's debt is not well covered by operating cash flow (14.8%).

Interest Coverage: BKH's interest payments on its debt are not well covered by EBIT (2.8x coverage).


Balance Sheet

Inventory Level: BKH has a high level of physical assets or inventory.

Debt Coverage by Assets: BKH's debt is not covered by short term assets (assets are 0.1x debt).


Next Steps

Dividend

What is Black Hills's current dividend yield, its reliability and sustainability?

2.59%

Current Dividend Yield


Dividend Yield vs Market

company2.6%marketbottom25%1.4%markettop25%3.7%industryaverage3.2%forecastin3Years2.8%

Current dividend yield vs market & industry

Notable Dividend: BKH's dividend (2.72%) is higher than the bottom 25% of dividend payers in the US market (1.4%).

High Dividend: BKH's dividend (2.72%) is low compared to the top 25% of dividend payers in the US market (3.66%).


Stability and Growth of Payments

Stable Dividend: BKH's dividends per share have been stable in the past 10 years.

Growing Dividend: BKH's dividend payments have increased over the past 10 years.


Current Payout to Shareholders

Dividend Coverage: With its reasonable payout ratio (55.4%), BKH's dividend payments are covered by earnings.


Future Payout to Shareholders

Future Dividend Coverage: BKH's dividends in 3 years are forecast to be covered by earnings (56% payout ratio).


Next Steps

Management

What is the CEO of Black Hills's salary, the management and board of directors tenure and is there insider trading?

5.0yrs

Average management tenure


CEO

Linn Evans (56yo)

1yrs

Tenure

US$2,187,831

Compensation

Mr. Linden R. Evans, also known as Linn, has been a Chief Executive Officer at Black Hills Power Inc. since January 1, 2019. Mr. Evans serves as a Chairman at Black Hills Power Inc. Mr. Evans served as Chi ...


CEO Compensation Analysis

Compensation vs Market: Linn's total compensation ($USD2.19M) is below average for companies of similar size in the US market ($USD6.46M).

Compensation vs Earnings: Linn's compensation has been consistent with company performance over the past year.


Management Age and Tenure

5.0yrs

Average Tenure

56yo

Average Age

Experienced Management: BKH's management team is seasoned and experienced (5 years average tenure).


Board Age and Tenure

6.0yrs

Average Tenure

63yo

Average Age

Experienced Board: BKH's board of directors are considered experienced (6 years average tenure).


Insider Trading

Insider Buying: Insufficient data to determine if insiders have bought more shares than they have sold in the past 3 months.


Recent Insider Transactions

SellUS$421,85008 Aug 19
Richard Kinzley
EntityIndividual
Role
Chief Financial Officer
Senior VP & CFO
Shares5,416
Max PriceUS$77.89
SellUS$503,83907 Jun 19
Brian Iverson
EntityIndividual
Role
Chief Legal Officer
Senior VP
Shares6,469
Max PriceUS$77.89
SellUS$150,28315 Feb 19
David Emery
EntityIndividual
Role
Chairman of the Board
Executive Chairman
Shares2,142.52
Max PriceUS$70.14

Ownership Breakdown

Dilution of Shares: Shareholders have been diluted in the past year, with total shares outstanding growing by 12.1%.


Management Team

  • David Emery (56yo)

    Executive Chairman

    • Tenure: 14.8yrs
    • Compensation: US$4.62m
  • Garner Anderson (57yo)

    Chief Risk Officer & VP

    • Tenure: 16.5yrs
  • Linn Evans (56yo)

    President

    • Tenure: 1yrs
    • Compensation: US$2.19m
  • Scott Buchholz (57yo)

    Senior VP & Chief Information Officer

    • Tenure: 11.5yrs
    • Compensation: US$927.80k
  • Rich Kinzley (53yo)

    Senior VP & CFO

    • Tenure: 5yrs
    • Compensation: US$1.37m
  • Brian Iverson (56yo)

    Senior VP

    • Tenure: 3.8yrs
    • Compensation: US$1.11m
  • Jerome Nichols

    Director

    • Esther Newbrough

      VP & Corporate Controller

      • Tenure: 5yrs
    • Kimberly Nooney

      VP & Treasurer

      • Tenure: 5yrs
    • Jennifer Landis (44yo)

      Senior VP & Chief HR Officer

      • Tenure: 2.9yrs

    Board Members

    • Steve Mills (63yo)

      Independent Director

      • Tenure: 8.3yrs
      • Compensation: US$185.00k
    • David Emery (56yo)

      Executive Chairman

      • Tenure: 14.8yrs
      • Compensation: US$4.62m
    • Mark Schober (63yo)

      Independent Director

      • Tenure: 4.3yrs
      • Compensation: US$172.50k
    • Tom Zeller (71yo)

      Independent Director

      • Tenure: 23yrs
      • Compensation: US$177.50k
    • John Vering (69yo)

      Lead Independent Director

      • Tenure: 3.8yrs
      • Compensation: US$205.00k
    • Mike Madison (70yo)

      Independent Director

      • Tenure: 7.7yrs
      • Compensation: US$187.50k
    • Linn Evans (56yo)

      President

      • Tenure: 1yrs
      • Compensation: US$2.19m
    • Teresa Taylor (55yo)

      Independent Director

      • Tenure: 3.3yrs
      • Compensation: US$170.00k
    • Becky Roberts (66yo)

      Independent Director

      • Tenure: 8.7yrs
      • Compensation: US$185.00k
    • Bob Otto (59yo)

      Independent Director

      • Tenure: 3yrs
      • Compensation: US$172.50k

    Company Information

    Black Hills Corporation's company bio, employee growth, exchange listings and data sources


    Key Information

    • Name: Black Hills Corporation
    • Ticker: BKH
    • Exchange: NYSE
    • Founded: 1941
    • Industry: Multi-Utilities
    • Sector: Utilities
    • Market Cap: US$5.043b
    • Shares outstanding: 61.45m
    • Website: https://www.blackhillscorp.com

    Number of Employees


    Location

    • Black Hills Corporation
    • 7001 Mount Rushmore Road
    • Rapid City
    • South Dakota
    • 57702
    • United States

    Listings

    TickerExchangePrimary SecuritySecurity TypeCountryCurrencyListed on
    BKHNYSE (New York Stock Exchange)YesCommon StockUSUSDJan 1969
    BHIDB (Deutsche Boerse AG)YesCommon StockDEEURJan 1969

    Biography

    Black Hills Corporation, through its subsidiaries, operates as an electric and natural gas utility company in the United States. It operates through Electric Utilities, Gas Utilities, Power Generation, and Mining segments. The Electric Utilities segment generates, transmits, and distributes electricity to approximately 212,000 electric customers in Colorado, Montana, South Dakota, and Wyoming, as well as provides electrical system construction services to large industrial customers. This segment owns 939 megawatts of generation capacity and 8,858 miles of electric transmission and distribution lines. The Gas Utilities segment distributes natural gas to approximately 1,054,000 natural gas utility customers in Arkansas, Colorado, Iowa, Kansas, Nebraska, and Wyoming. It also provides appliance repair services to residential customers through company technicians and third-party service providers; and constructs and maintains gas infrastructure facilities for gas transportation customers. This segment owns and operates approximately 4,700 miles of intrastate gas transmission pipelines; 41,158 miles of gas distribution mains and service lines; 7 natural gas storage sites; and approximately 45,000 horsepower of compression and 600 miles of gathering lines. The Power Generation segment produces electric power through wind, natural gas, and coal generating plants; and sells the electric capacity and energy primarily to utilities under long-term contracts. The Mining segment produces coal at its coal mine located near Gillette, Wyoming; and sells the coal to electric generation facilities. Black Hills Corporation was founded in 1941 and is headquartered in Rapid City, South Dakota. 


    Company Analysis and Financial Data Status

    All financial data provided by Standard & Poor's Capital IQ.
    DataLast Updated (UTC time)
    Company Analysis2020/01/23 23:32
    End of Day Share Price2020/01/23 00:00
    Earnings2019/09/30
    Annual Earnings2018/12/31


    Unless specified all financial data is based on a yearly period but updated quarterly. This is known as Trailing Twelve Month (TTM) or Last Twelve Month (LTM) Data. Learn more here.