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Relative valuation derived from Utilities sector median benchmarks. Model weights: EV/EBITDA (40%), P/B (35%), P/S (25%). Multiples adjusted for extreme outliers and non-recurring volatility.
Auditing capital efficiency...
Quality Profile Audit
Score: 50GRADE C+
Composite assessment of profitability, capital efficiency, and financial strength. Top-tier entities demonstrate sustainable cash flow generation.
Return on Equity
Profit generated per dollar of shareholder equity
5.6%
Sector: 9.9%
Dividend Analysis audit
No Dividend
This company does not currently pay a dividend.
Analyst Projections
Analyst Consensus
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Based on our 6-factor quantitative model, BLACK HILLS CORP /SD/ (BKH) receives a "Hold" rating with a composite score of 52.5/100, ranked #835 out of 4446 stocks. Key factor scores: Quality 50/100, Value 73/100, Momentum 55/100. This is quantitative analysis only — not investment advice.
BLACK HILLS CORP /SD/ (BKH) Stock Analysis — April 2026 Rating, Price, and Forecast
Company Overview — What Does BLACK HILLS CORP /SD/ Do?
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. BLACK HILLS CORP /SD/ (BKH) is classified as a mid-cap stock in the Utilities sector. The company is led by CEO Linden R. Evans and employs approximately 2,980 people, headquartered in Rapid City, South Dakota. With a market capitalization of $5.3B, BKH is one of the notable companies in the Utilities sector.
BLACK HILLS CORP /SD/ (BKH) Stock Rating — Hold (April 2026)
As of April 2026, BLACK HILLS CORP /SD/ receives a Hold rating with a composite score of 52.5/100 and 3 out of 5 stars from the Blank Capital Research quantitative model.BKH ranks #835 out of 4,446 stocks in our coverage universe. Within the Utilities sector, BLACK HILLS CORP /SD/ ranks #67 of 112 stocks, placing it in the lower half of its Utilities peers. The rating is generated by a multi-factor model that weighs quality (30%), momentum (25%), value (15%), investment (10%), stability (10%), and short interest (10%).
BKH Stock Price and 52-Week Range
BLACK HILLS CORP /SD/ (BKH) currently trades at $73.80. The stock lost $0.21 (0.3%) in the most recent trading session. The 52-week high for BKH is $75.87, which means the stock is currently trading -2.7% from its annual peak. The 52-week low is $54.92, putting the stock 34.4% above its annual trough. Recent trading volume was 700K shares, suggesting relatively thin trading activity.
Is BKH Overvalued or Undervalued? — Valuation Analysis
BLACK HILLS CORP /SD/ (BKH) carries a value factor score of 73/100 in the Blank Capital model, suggesting the stock trades at a meaningful discount to its fundamental earning power. The trailing price-to-earnings ratio is 25.81x, compared to the Utilities sector average of 23.47x — a premium of 10%. The price-to-book ratio stands at 1.44x, versus the sector average of 1.98x. The price-to-sales ratio is 2.70x, compared to 0.82x for the average Utilities stock. On an enterprise value basis, BKH trades at 7.78x EV/EBITDA, versus 4.75x for the sector.
Based on these multiples, BLACK HILLS CORP /SD/ appears attractively valued relative to both its sector peers and the broader market. Value-oriented investors may find the current entry point compelling, particularly if the company's fundamental quality metrics also score well.
BLACK HILLS CORP /SD/ Profitability — ROE, Margins, and Quality Score
BLACK HILLS CORP /SD/ (BKH) earns a quality factor score of 50/100, indicating solid business quality with consistent operational execution. The return on equity (ROE) is 5.6%, compared to the Utilities sector average of 9.9%, which is below typical expectations for high-quality companies. Return on assets (ROA) comes in at 2.0% versus the sector average of 3.1%.
On a margin basis, BLACK HILLS CORP /SD/ reports gross margins of 74.0%, compared to 53.1% for the sector. The operating margin is 20.4% (sector: 21.5%). Net profit margin stands at 9.0%, versus 12.8% for the average Utilities stock. Revenue growth is running at 6.9% on a trailing basis, compared to 20.1% for the sector. The overall profitability profile is adequate, though there may be room for margin expansion.
BKH Debt, Balance Sheet, and Financial Health
BLACK HILLS CORP /SD/ has a debt-to-equity ratio of 178.0%, compared to the Utilities sector average of 164.5%. This elevated leverage warrants close monitoring, as it increases the company's sensitivity to rising interest rates and economic downturns. The current ratio is 1.35x, suggesting adequate working capital coverage. Total debt on the balance sheet is $4.38B. Cash and equivalents stand at $21M.
BKH has a beta of 0.22, meaning it is less volatile than the S&P 500, making it a relatively defensive holding. The stability factor score for BLACK HILLS CORP /SD/ is 92/100, indicating low-volatility characteristics and consistent price behavior that appeals to risk-averse investors.
BLACK HILLS CORP /SD/ Revenue and Earnings History — Quarterly Trend
In TTM 2026, BLACK HILLS CORP /SD/ reported revenue of $2.08B and earnings per share (EPS) of $3.99. Net income for the quarter was $218M. Gross margin was 74.0%. Operating income came in at $442M.
In FY 2025, BLACK HILLS CORP /SD/ reported revenue of $2.31B and earnings per share (EPS) of $3.99. Net income for the quarter was $300M. Revenue grew 8.6% year-over-year compared to FY 2024. Operating income came in at $538M.
In Q3 2025, BLACK HILLS CORP /SD/ reported revenue of $430M and earnings per share (EPS) of $0.34. Net income for the quarter was $26M. Revenue grew 7.1% year-over-year compared to Q3 2024. Operating income came in at $79M.
In Q2 2025, BLACK HILLS CORP /SD/ reported revenue of $439M and earnings per share (EPS) of $0.38. Net income for the quarter was $29M. Revenue grew 9.0% year-over-year compared to Q2 2024. Operating income came in at $83M.
Over the past 8 quarters, BLACK HILLS CORP /SD/ has demonstrated a growth trajectory, with revenue expanding from $403M to $2.08B. Investors analyzing BKH stock should weigh these quarterly trends alongside the valuation and quality metrics discussed above.
BKH Dividend Yield and Income Analysis
BLACK HILLS CORP /SD/ (BKH) does not currently pay a dividend. This is common among smaller companies in the Utilities industry that prefer to reinvest cash flows into business expansion rather than returning capital to shareholders. Income-focused investors looking for Utilities dividend stocks may want to explore other Utilities stocks or use the stock screener to filter by dividend yield.
BKH Momentum and Technical Analysis Profile
BLACK HILLS CORP /SD/ (BKH) has a momentum factor score of 55/100, reflecting neutral trend characteristics. The stock is neither significantly outperforming nor underperforming the broader market on a momentum basis. The investment factor score is 30/100, which measures capital allocation efficiency and asset growth patterns. The short interest score of 5/100 signals elevated short interest, which can indicate bearish sentiment among institutional investors.
BKH vs Competitors — Utilities Sector Ranking and Peer Comparison
Comparing BKH against the S&P 500 benchmark is also instructive for understanding relative performance. Investors can view the full BKH vs S&P 500 (SPY) comparison to assess how BLACK HILLS CORP /SD/ stacks up against the broader market across all factor dimensions.
BKH Next Earnings Date
No upcoming earnings date has been announced for BLACK HILLS CORP /SD/ (BKH) at this time. Check the earnings calendar for the latest scheduling updates across all stocks in our coverage universe.
Should You Buy BKH? — Investment Thesis Summary
BLACK HILLS CORP /SD/ presents a balanced picture with arguments on both sides. The value score of 73/100 suggests attractive pricing relative to fundamentals. Low volatility (stability score 92/100) reduces downside risk.
In summary, BLACK HILLS CORP /SD/ (BKH) earns a Hold rating with a composite score of 52.5/100 as of April 2026. The rating is derived from the Blank Capital Research methodology, which combines six factor dimensions into a single quantitative ranking. Investors should consider these quantitative signals alongside their own fundamental research, risk tolerance, and investment time horizon before making buy or sell decisions on BKH stock.
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Institutional Research Dossier
BLACK HILLS CORP /SD/ (BKH) Deep Dive Analysis
Published on March 24, 2026
Action RatingHold
Sections
Executive Summary
We maintain our Hold rating on Black Hills Corporation (BKH). The company operates in a relatively stable, regulated utility environment, providing essential electric and gas services across several states. While BKH exhibits some attractive valuation metrics compared to its peers, particularly in P/E and EV/EBITDA, its lower profitability, higher leverage, and negative free cash flow raise concerns about its long-term financial health and growth prospects, justifying a neutral stance.
The primary concern revolves around BKH's ability to generate sufficient cash flow to fund its capital expenditures and dividend payments without increasing its debt burden significantly. While the company benefits from a constructive regulatory environment that allows for cost recovery, the execution of its growth strategy and the management of its debt levels will be critical factors in determining its future performance. Investors should closely monitor the company's ability to improve its profitability and free cash flow generation in the coming quarters.
Business Strategy & Overview
Black Hills Corporation operates as a regulated utility, deriving revenue from the distribution of electricity and natural gas to a diverse customer base across several states, including Colorado, Montana, South Dakota, Wyoming, Arkansas, Iowa, Kansas, and Nebraska. The company's strategy centers on investing in infrastructure upgrades and expanding its service territory to meet growing demand. A key component of BKH's business model is its ability to recover costs and earn a regulated rate of return on its investments, providing a degree of predictability to its earnings.
The company operates through two main segments: Electric Utilities and Gas Utilities. The Electric Utilities segment focuses on generating, transmitting, and distributing electricity, while the Gas Utilities segment distributes natural gas. BKH also engages in activities such as constructing and maintaining gas infrastructure facilities for transportation customers and providing appliance repair services. Furthermore, the company owns and operates coal mines, contributing to its energy generation portfolio.
BKH's strategic positioning within the utility sector is characterized by its geographic diversification and its focus on providing essential services to a relatively stable customer base. The company's regulated business model provides a degree of insulation from economic downturns, as demand for electricity and natural gas remains relatively constant. However, BKH faces challenges related to regulatory changes, environmental regulations, and the need to invest in renewable energy sources.
The company's product pipeline primarily consists of infrastructure projects aimed at improving the reliability and efficiency of its electric and gas distribution systems. These projects include upgrades to transmission lines, distribution networks, and natural gas pipelines. BKH also invests in renewable energy projects, such as wind and solar farms, to meet growing demand for clean energy and comply with environmental regulations. The success of these projects is crucial to the company's long-term growth and profitability.
Execution Benchmarks audit
Revenue Growth
YOY expansion rate
6.9%
Sector: 20.1%
-66% VS SCTR
Economic Moat Analysis
Black Hills Corporation possesses a Narrow economic moat, primarily derived from its regulated utility operations. The company's electric and gas distribution businesses benefit from exclusive service territories and regulatory frameworks that limit competition. These regulations create barriers to entry, making it difficult for new players to enter the market and compete with BKH. The regulated nature of the business also allows BKH to recover its costs and earn a reasonable rate of return on its investments, providing a degree of earnings stability.
The company's moat is further supported by the essential nature of its services. Electricity and natural gas are necessities for residential and commercial customers, creating a stable and predictable demand for BKH's services. This inelastic demand provides the company with pricing power and reduces its vulnerability to economic downturns. However, the company's moat is not as wide as some of its peers due to the potential for regulatory changes and the increasing adoption of distributed generation technologies, such as solar panels.
While BKH benefits from regulatory barriers to entry, it also faces regulatory oversight that can limit its profitability. Regulators set the rates that BKH can charge its customers, which can impact the company's ability to earn a high return on its investments. Additionally, regulatory changes related to environmental regulations and renewable energy mandates can increase the company's costs and require significant capital expenditures.
The increasing adoption of distributed generation technologies, such as solar panels and battery storage, poses a potential threat to BKH's moat. As more customers generate their own electricity, demand for BKH's services may decline, reducing its revenue and profitability. The company needs to adapt to these changes by investing in renewable energy sources and developing new business models that integrate distributed generation into its grid.
Financial Health & Profitability
Black Hills Corporation's financial health presents a mixed picture. While the company has demonstrated consistent revenue growth, its profitability metrics lag behind the sector average. The company's revenue for FY2025 was $2.31 billion, compared to $2.13 billion in FY2024, representing a growth rate of approximately 8.5%. However, its net income margin of 9.0% is lower than the sector average of 12.8%, indicating that the company is less efficient at converting revenue into profit.
The company's return on equity (ROE) of 5.6% is significantly lower than the sector average of 10.0%, suggesting that BKH is not generating as much profit from its shareholders' equity as its peers. This could be due to a combination of factors, including lower margins, higher leverage, and less efficient asset utilization. The company's debt-to-equity ratio of 178.00 is higher than the sector average of 165.00, indicating that BKH relies more heavily on debt financing than its peers. This higher leverage increases the company's financial risk and could limit its ability to invest in growth opportunities.
A significant concern is the company's negative free cash flow of -$353.53 million. This indicates that BKH is spending more cash than it is generating from its operations, which could put pressure on its balance sheet and require the company to raise additional capital. The negative free cash flow is likely due to a combination of factors, including high capital expenditures and lower profitability. The quarterly financial history shows consistent revenue generation, but the net income fluctuates, impacting overall profitability.
The company's current ratio of 1.35 indicates that it has sufficient liquid assets to cover its short-term liabilities. However, the low cash balance of $21.10 million raises concerns about its ability to meet its immediate obligations. The company's EBITDA of $821.30 million provides some comfort, as it demonstrates that BKH is generating a significant amount of cash from its operations before accounting for depreciation, interest, and taxes. However, the company needs to improve its free cash flow generation to ensure its long-term financial stability.
Valuation Assessment
Black Hills Corporation's valuation presents a mixed picture. The company's P/E ratio of 17.0x is lower than the sector average of 22.7x, suggesting that the stock is undervalued relative to its earnings. Similarly, its EV/EBITDA ratio of 1.6x is significantly lower than the sector average of 4.8x, further indicating that the stock is undervalued based on its enterprise value and earnings before interest, taxes, depreciation, and amortization. However, these lower multiples may reflect the company's lower profitability, higher leverage, and negative free cash flow.
The company's historical growth rate and future growth prospects need to be considered when assessing its valuation. While BKH has demonstrated consistent revenue growth, its earnings growth has been more volatile. The company's future growth prospects are dependent on its ability to invest in infrastructure upgrades, expand its service territory, and adapt to changing regulatory and technological landscapes. The negative free cash flow raises concerns about the company's ability to fund these growth initiatives without increasing its debt burden.
Compared to its historical valuation, BKH's current P/E ratio is in line with its historical average, suggesting that the stock is fairly valued based on its past performance. However, the company's negative free cash flow and lower profitability relative to its peers warrant a more cautious approach to valuation. The market may be discounting the stock due to these concerns, resulting in the lower P/E and EV/EBITDA multiples.
Given the company's lower profitability, higher leverage, and negative free cash flow, we believe that the stock is fairly valued at its current levels. While the lower P/E and EV/EBITDA multiples may appear attractive, they reflect the company's underlying financial challenges. Investors should closely monitor the company's ability to improve its profitability and free cash flow generation before considering a more bullish stance.
Risk & Uncertainty
Black Hills Corporation faces several risks and uncertainties that could impact its financial performance and stock price. One of the primary risks is regulatory risk. The company operates in a regulated environment, and changes in regulations could impact its ability to recover costs and earn a reasonable rate of return on its investments. For example, changes in environmental regulations could require the company to invest in costly upgrades to its infrastructure, while changes in rate-setting policies could limit its ability to increase prices.
Another significant risk is commodity price risk. The company's gas utility business is exposed to fluctuations in natural gas prices, which could impact its profitability. While the company typically passes through these costs to its customers, there is a risk that it may not be able to fully recover its costs in a timely manner. Additionally, the company's coal-fired power plants are exposed to fluctuations in coal prices, which could impact its electricity generation costs.
The company also faces operational risks related to its infrastructure. Disruptions to its electric and gas distribution systems could result in outages and service interruptions, which could damage its reputation and result in financial losses. The company's infrastructure is also vulnerable to cyberattacks, which could compromise its data and disrupt its operations. The high debt load also presents a risk, as rising interest rates could increase the company's borrowing costs and reduce its profitability.
Finally, the increasing adoption of distributed generation technologies, such as solar panels and battery storage, poses a potential threat to the company's business model. As more customers generate their own electricity, demand for the company's services may decline, reducing its revenue and profitability. The company needs to adapt to these changes by investing in renewable energy sources and developing new business models that integrate distributed generation into its grid.
Bulls Say / Bears Say
The Bull Case
BULL VIEWBlack Hills operates in a stable, regulated environment, providing essential services with predictable cash flows and a constructive regulatory framework that allows for cost recovery.
BULL VIEWThe company's lower P/E and EV/EBITDA multiples compared to peers suggest that the stock is undervalued and offers potential upside as the company improves its profitability and free cash flow generation.
BULL VIEWBKH's strategic investments in infrastructure upgrades and renewable energy projects will drive long-term growth and enhance its ability to meet growing demand for clean energy.
The Bear Case
BEAR VIEWBlack Hills' negative free cash flow and high debt levels raise concerns about its ability to fund its capital expenditures and dividend payments without increasing its financial risk.
BEAR VIEWThe company's lower profitability and ROE compared to peers indicate that it is less efficient at generating profit from its assets and shareholders' equity.
BEAR VIEWIncreasing adoption of distributed generation technologies and potential regulatory changes pose a threat to the company's business model and could reduce its revenue and profitability.
About the Author
Marques Blank
Founder & Chief Investment Officer, Blank Capital
Marques brings 15 years of institutional finance and investing experience, having overseen financial planning for a $1.6B defense business unit. He developed the proprietary 6-factor quantitative model used to score BKH and 4,400+ other equities.
BLACK HILLS CORP /SD/ exhibits a 68% valuation premium relative to institutional benchmarks. This represents a potential valuation overextension based on current multiples.
Return on Assets
Efficiency of asset utilization
2.0%
Sector: 3.1%
Gross Margin
Pricing power and cost efficiency
74.0%
Sector: 53.1%
Operating Margin
Core business profitability
20.4%
Sector: 21.5%
Net Margin
Bottom-line profitability
9.0%
Sector: 12.8%
Factor Methodology
The Quality factor evaluates the persistence and magnitude of cash flows. Companies with scores >70 exhibit superior competitive moats and financial resilience through economic cycles.
