Black Hills (BKH) AI Stock Analysis

• Market Cap: $4.39B
• Dividend Yield: 4.29%
• Average Volume (3M): 487.91K
• Price to Earnings (P/E): 15.6
• Beta (1Y): 0.37
• Revenue Growth: -8.73%
• EPS Growth: 0.14%
• Country: US
• Employees: 2,841
• Sector: Utilities
• Sector Strength: 94
• Industry: Diversified Utilities
• EPS (TTM): 3.92
• Shares Outstanding: 72,086,470
• 10 Day Avg. Volume: 352,222
• 30 Day Avg. Volume: 487,908
• PEG Ratio: 108.99
• Price to Book (P/B): N/A
• Price to Sales (P/S): 0.00
• Price to Cash Flow (P/CF): 0.00
• P/FCF Ratio: 0.00
• Enterprise Value/Market Cap: 1.97
• Enterprise Value/Revenue: N/A
• Enterprise Value/Gross Profit: 4.06
• Enterprise Value/Ebitda: N/A
• 1Y Price Target: $62.50
• Price Target Upside: 2.63% Upside
• Rating Consensus: Moderate Sell
• Number of Analyst Covering: 2

Black Hills scores well due to its stable financial performance, positive technical indicators, and reasonable valuation. The company's robust earnings call further boosts confidence with its strategic investments and growth plans, although high liabilities and capital expenditure impact free cash flow.

Positive Factors

Data Center Growth

The data center growth thesis remains intact, with expectations that data center customer-derived EPS will rise to 10%+ by 2028.

Energy Initiatives

The CO PUC authorized 100MW of utility-owned solar, 50MW of utility-owned battery storage, and a 200MW solar PPA in BKH's CO Clean Energy Plan.

Regulatory Strategy

BKH continues to execute on its regulatory strategy, reaching settlements in both its AR Gas and IA Gas rate cases this year.

Negative Factors

Financing Costs

Financing costs still pose a headwind, with potential pressure to BKH’s EPS CAGR from incremental equity issuance and debt refinancing.

Growth Rate Concerns

The prescribed growth rate is below-average relative to peers and likely relies on regulatory execution across several jurisdictions where customer bill affordability remains a key consideration.

Black Hills Business Overview & Revenue Model

Company Description

Black Hills Corporation, through its subsidiaries, operates as an electric and natural gas utility company in the United States. It operates in two segments, Electric Utilities and Gas Utilities. The Electric Utilities segment generates, transmits, and distributes electricity to approximately 218,000 electric utility customers in Colorado, Montana, South Dakota, and Wyoming; and owns and operates 1,481.5 megawatts of generation capacity and 8,892 miles of electric transmission and distribution lines. The Gas Utilities segment distributes natural gas to approximately 1,094,000 natural gas utility customers in Arkansas, Colorado, Iowa, Kansas, Nebraska, and Wyoming; owns and operates 4,732 miles of intrastate gas transmission pipelines; 41,644 miles of gas distribution mains and service lines; six natural gas storage sites; and approximately 50,000 horsepower of compression and 515 miles of gathering lines. The company also constructs and maintains gas infrastructure facilities for gas transportation customers; and provides appliance repair services to residential utility customers, as well as electrical system construction services to large industrial customers. In addition, it produces electric power through wind, natural gas, and coal-fired generating plants; and coal at its coal mine located near Gillette, Wyoming. The company was incorporated in 1941 and is headquartered in Rapid City, South Dakota.

How the Company Makes Money

Black Hills Corporation generates revenue primarily through its regulated utility operations. The company earns money by providing electricity and natural gas services to residential, commercial, industrial, and municipal customers. Revenue is derived from the rates set by regulatory commissions, which allow for the recovery of costs and a return on investment. The company also benefits from infrastructure investments, such as the expansion and maintenance of its transmission and distribution networks, which are typically approved by regulators and incorporated into customer rates. Additionally, Black Hills may engage in non-regulated energy services, although these activities represent a smaller portion of its overall earnings. Strategic partnerships, regulatory relationships, and a focus on operational efficiency further support its financial performance.

Black Hills Financial Statement Overview

Summary

Black Hills demonstrates financial stability with consistent revenue growth and operational efficiency. However, the high liabilities on the balance sheet and negative free cash flow due to capital expenditures pose some risks.

Income Statement

The income statement shows a stable revenue base with a modest revenue growth from $2.127 billion to $2.331 billion. The gross profit margin remains high, reflecting the regulated nature of the industry, but net profit margin is relatively lower. The EBIT margin is healthy and the EBITDA margin is robust, indicating good operational efficiency. However, the net income has seen fluctuations, indicating some volatility in earnings.

Balance Sheet

The balance sheet reflects a solid equity base with a consistent increase in stockholders' equity over the years. The debt-to-equity ratio is moderate, showing a balanced use of leverage, but the high total liabilities compared to equity could be a concern. The equity ratio is relatively stable, indicating a decent proportion of assets financed by equity.

Cash Flow

Cash flow analysis indicates strong operating cash flow with consistent generation over the years. However, free cash flow has been negative at times due to high capital expenditures, typical for the utilities industry. The operating cash flow to net income ratio suggests good cash conversion efficiency, but the free cash flow to net income ratio is a concern due to negative free cash flows.

Breakdown
Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement		Total Revenue
2.13B	2.33B	458.50M	413.90M	1.70B
	Gross Profit
2.13B	796.40M	-1.32B	-829.72M	652.70M
	EBIT
503.10M	472.70M	206.09M	174.95M	428.30M
	EBITDA
785.30M	735.50M	706.61M	645.64M	649.81M
	Net Income Common Stockholders
273.10M	262.20M	258.40M	236.70M	227.61M
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
16.10M	86.60M	21.43M	8.92M	6.36M
	Total Assets
10.02B	9.62B	9.62B	9.13B	8.09B
	Total Debt
133.80M	4.40B	4.67B	4.55B	3.77B
	Net Debt
133.80M	4.31B	4.65B	4.54B	3.76B
	Total Liabilities
6.44B	6.31B	6.53B	6.24B	5.43B
	Stockholders Equity
3.50B	3.22B	2.99B	2.79B	2.56B
Cash Flow		Free Cash Flow
-24.90M	388.80M	-19.56M	-742.06M	-225.54M
	Operating Cash Flow
719.30M	944.40M	584.80M	-64.56M	541.86M
	Investing Cash Flow
-746.00M	-536.70M	-603.88M	-664.23M	-761.66M
	Financing Cash Flow
-42.90M	-341.70M	32.25M	731.87M	216.88M

Black Hills Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 60.90
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Negative
• RSI: Neutral
• STOCH: Negative

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For BKH, the sentiment is Positive. The current price of 60.9 is above the 20-day moving average (MA) of 59.69, above the 50-day MA of 59.92, and above the 200-day MA of 58.84, indicating a bullish trend. The MACD of 0.36 indicates Negative momentum. The RSI at 56.36 is Neutral, neither overbought nor oversold. The STOCH value of 80.31 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for BKH.

Black Hills Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
NWE	73 Outperform	$3.61B	16.10	7.94%	4.38%	4.31%	19.33%
BKH	72 Outperform	$4.39B	15.57	8.13%	4.29%	-8.73%	0.14%
OTTR	68 Neutral	$3.26B	10.88	19.39%	2.47%	-1.38%	2.28%
MGEE	66 Neutral	$3.29B	27.07	10.17%	1.98%	-1.95%	2.33%
ALE	64 Neutral	$3.78B	21.03	6.34%	4.36%	-18.62%	-27.88%
Sector *	63 Neutral	$8.52B	12.04	6.70%	4.34%	3.08%	-11.00%
AVA	56 Neutral	$3.33B	18.16	7.09%	4.61%	10.64%	2.28%

Black Hills Corporate Events

Black Hills CIO Erik Keller Resigns

On January 31, 2025, Erik Keller announced his resignation as Senior Vice President and Chief Information Officer of Black Hills Corporation, a South Dakota-based company, effective February 28, 2025. This announcement may impact Black Hills Corporation’s leadership structure and future strategic direction, but specific implications for stakeholders are not detailed in the release.