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1. Company Snapshot

1.a. 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.

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1.b. Last Insights on BKH

The recent performance of Black Hills Corporation was negatively impacted by a rate review application filed in Kansas, seeking to recover capital infrastructure and operational costs. This development may lead to increased expenses and potentially affect the company's future earnings. Additionally, the company's request for a rate review and rider renewal in Kansas may result in regulatory scrutiny and potential delays in implementing rate increases. These factors may have contributed to the company's recent performance.

1.c. Company Highlights

2. Black Hills Corp's Q3 2025 Earnings: Steady Performance Amidst Strategic Growth Initiatives

Black Hills Corp reported a GAAP EPS of $0.34 and an adjusted EPS of $0.45 for Q3 2025, in line with analyst estimates. The company's year-to-date EPS stood at $2.58, or $2.68 on an adjusted basis, marking a 6.3% increase over the same period last year. The company's financial performance was characterized by a strong capital investment plan, with a total outlay of $4.7 billion, prioritizing customer needs for safety, reliability, and growth. As per Linn Evans, President and CEO, the company is focused on executing its strategic growth initiatives.

Publication Date: Nov -09

📋 Highlights
  • EPS Growth and Guidance:: Q3 2025 adjusted EPS of $0.45 (6.3% YTD increase to $2.68) reaffirms 2025 guidance of $4–$4.20, reflecting 5% growth over 2024.
  • Capital Investment Plan:: $4.7 billion capital program with $700M annual base, focusing on safety, reliability, and projects like Ready Wyoming transmission and Lange II generation.
  • Rate Review Success:: Seven rate reviews since 2024, including a Nebraska settlement adding $23.9M in annual revenue.
  • Data Center Growth Potential:: Over 3GW of potential data center load in negotiations, with EPS upside expected as contracts progress, despite uncertainties in hyperscaler agreements.
  • Merger Timeline:: NorthWestern Energy merger on track for 2H 2025 regulatory approval, with potential growth outlook updates if pre-merger data center contracts are signed.

Capital Investment and Growth Initiatives

The company's major projects include the Ready Wyoming transmission expansion, the Lange II generation project, and a battery storage project. These initiatives are expected to drive growth and enhance the company's reliability record, which is already industry-leading. The merger with NorthWestern Energy is on track, with regulatory approvals expected in the second half of 2025. The company has also successfully completed seven rate reviews since the beginning of last year, providing $23.9 million in new annual revenue.

Data Center Demand and Growth Opportunities

Data center demand is a significant growth opportunity for Black Hills, with over 3 gigawatts of potential load in negotiations. The company has executed nondisclosure agreements and is negotiating service agreements for these projects. Management expects significant long-term growth from data centers, although the actual EPS upside will depend on the nuances of contractual agreements with hyperscalers.

Valuation and Dividend Yield

Black Hills' current valuation metrics indicate a P/E Ratio of 17.75, P/B Ratio of 1.39, and a Dividend Yield of 3.84%. The company's ROE stands at 8.0%, and its ROIC is 4.87%. With a Net Debt / EBITDA ratio of 5.39, the company's leverage is relatively high. Analysts estimate next year's revenue growth at 3.1%, which is slightly lower than the company's expected long-term growth rate of 4-6%.

Outlook and Merger Update

The company reaffirmed its 2025 earnings guidance, with an adjusted EPS range of $4 to $4.20, representing a 5% growth rate over 2024. Management is confident in the company's operational and financial performance, with the Wyoming Ready project on schedule to be completed by the end of the year. The merger with NorthWestern Energy is expected to drive long-term growth and create new opportunities for the company.

3. NewsRoom

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3 Dividend Stocks Warren Buffett Would Love in Today's Market

Nov -20

Source: 247wallst.com

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Buy 3 Ideal Dividend Kings Of 24 'Safer' In November's 56

Nov -10

Source: seekingalpha.com

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Black Hills Corporation (BKH) Q3 2025 Earnings Call Transcript

Nov -06

Source: seekingalpha.com

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Black Hills Corp. Reports 2025 Third-Quarter Results and Reaffirms 2025 Adjusted Earnings Guidance

Nov -05

Source: globenewswire.com

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Black Hills Corp. Announces Quarterly Dividend

Oct -29

Source: globenewswire.com

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A High-Yielding Trio To Scoop Up Now

Oct -23

Source: seekingalpha.com

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Top 2 Utilities Stocks You May Want To Dump This Quarter

Oct -23

Source: benzinga.com

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Buy 2 Ideal Dividend Kings Of 25 'Safer' In October's 56

Oct -10

Source: seekingalpha.com

4. Business Breakdown

4.a. Revenues by Country

4.b. Revenues by Segment

5. Expected revenues mid-term growth (4.87%)

6. Segments

Gas Utilities

Expected Growth: 4.5%

Black Hills Corporation's Gas Utilities segment growth of 4.5% is driven by increasing demand for natural gas, expansion of infrastructure in the Rocky Mountains, and strategic acquisitions. Additionally, favorable regulatory environments, rate base growth, and cost savings initiatives contribute to the segment's growth.

Electric Utilities

Expected Growth: 5.5%

Black Hills Corporation's Electric Utilities segment growth of 5.5% is driven by increasing demand for electricity in its service territories, rate base growth from infrastructure investments, and favorable regulatory environments. Additionally, the company's focus on renewable energy and grid modernization initiatives contributes to its growth momentum.

7. Detailed Products

Electricity

Generation, transmission, and distribution of electricity to residential, commercial, and industrial customers

Natural Gas

Distribution of natural gas to residential, commercial, and industrial customers

Oil and Gas Production

Exploration, production, and marketing of crude oil and natural gas

Coal Mining

Mining and marketing of coal to generate electricity and produce steel

Municipal and Cooperative Utilities

Ownership and operation of municipal and cooperative utilities

8. Black Hills Corporation's Porter Forces

Forces Ranking

Threat Of Substitutes

Black Hills Corporation operates in the utility industry, which has a moderate threat of substitutes. While there are alternative energy sources available, the cost and convenience of traditional energy sources make them a preferred choice for many customers.

Bargaining Power Of Customers

Black Hills Corporation's customers have limited bargaining power due to the lack of alternative energy providers in the region. This gives the company an upper hand in negotiating prices and contracts.

Bargaining Power Of Suppliers

Black Hills Corporation relies on a diverse range of suppliers for fuel, equipment, and services. While suppliers have some bargaining power, the company's scale and diversification of suppliers mitigate this risk.

Threat Of New Entrants

The utility industry has high barriers to entry, including significant capital requirements and regulatory hurdles. This makes it difficult for new entrants to challenge Black Hills Corporation's market position.

Intensity Of Rivalry

Black Hills Corporation operates in a moderately competitive market, with a few large players competing for market share. While there is some rivalry, the company's strong brand and diversified operations help to mitigate this risk.

9. SWOT Analysis

Strength

Weaknesses

Opportunities

Threats

10. Capital Structure

10.a. Balance Sheet

10.b. Weighted Average Cost of capital

Value
Debt Weight 57.79%
Debt Cost 4.40%
Equity Weight 42.21%
Equity Cost 7.10%
WACC 5.54%
Leverage 136.88%

11. Quality Control: Black Hills Corporation passed 3 out of 9 key points

12.a Historical Valuation

12.b Price/Earnings Ratio

12.c Margin Valuation

12.d Peers Valuation

Peers Group Analysis

Stock-Card
Otter Tail

A-Score: 6.6/10

Value: 5.3

Growth: 7.0

Quality: 6.5

Yield: 6.0

Momentum: 6.0

Volatility: 8.7

1-Year Total Return ->

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Stock-Card
NorthWestern

A-Score: 6.5/10

Value: 6.1

Growth: 3.4

Quality: 5.1

Yield: 8.0

Momentum: 6.0

Volatility: 10.0

1-Year Total Return ->

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Stock-Card
ALLETE

A-Score: 6.4/10

Value: 5.9

Growth: 4.0

Quality: 4.3

Yield: 8.0

Momentum: 6.0

Volatility: 10.0

1-Year Total Return ->

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Stock-Card
Avista

A-Score: 6.3/10

Value: 6.5

Growth: 4.2

Quality: 4.3

Yield: 8.0

Momentum: 4.5

Volatility: 10.0

1-Year Total Return ->

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Stock-Card
Black Hills

A-Score: 6.2/10

Value: 5.2

Growth: 4.4

Quality: 4.4

Yield: 8.0

Momentum: 5.0

Volatility: 10.0

1-Year Total Return ->

View Full Report
Stock-Card
AES

A-Score: 5.1/10

Value: 6.6

Growth: 5.4

Quality: 3.5

Yield: 8.0

Momentum: 3.0

Volatility: 4.0

1-Year Total Return ->

View Full Report

Peers Metrics

12.e Scoring Insights

12.f DCF BETA

Parameters

Short Term Growth

Short term Time

Long-Term Growth

WACC

Target Price

69.94$

Current Price

69.94$

Potential

-0.00%

Expected Cash-Flows