Breaking Down Black Hills Corporation (BKH) Financial Health: Key Insights for Investors

Are you keeping a close watch on your investments and wondering how Black Hills Corporation (BKH) is performing? Did you know that in 2024, the company reported a diluted earnings per share (EPS) of $3.91, a 4.3% increase from the midpoint of the 2023 earnings guidance? And what about their revenue, which reached $2.12 Billion USD for 2024? With a planned capital investment of $4.7 billion from 2025 through 2029, including $1 billion for 2025, how will this impact future growth and shareholder value? Keep reading to explore a detailed breakdown of Black Hills Corporation's financial health, providing key insights for investors.

Black Hills Corporation (BKH) Revenue Analysis

Understanding Black Hills Corporation's financial health requires a close look at its revenue streams. The company primarily generates revenue through its utilities segment, serving electric and natural gas customers. For a deeper understanding of the company's guiding principles, refer to: Mission Statement, Vision, & Core Values of Black Hills Corporation (BKH).

Here's a breakdown of what drives BKH's income:

• Electric Utilities: Revenue comes from the sale of electricity to residential, commercial, and industrial customers across its service territories.
• Gas Utilities: This involves the distribution of natural gas to homes and businesses.
• Power Generation: Black Hills Corporation generates power from a mix of resources and sells this electricity into the market.

Analyzing the year-over-year revenue growth rate provides insights into the company's performance and market position. While specific percentage increases or decreases fluctuate annually based on factors like weather, economic conditions, and regulatory changes, examining historical trends reveals overall growth patterns. For example, in 2024, Black Hills Corp reported revenues of $2.432 billion, a 4.45% increase year-over-year.

To understand the contribution of different business segments to overall revenue, consider the following:

The utilities segment, comprising both electric and gas operations, typically accounts for the majority of Black Hills Corporation's revenue. Power generation contributes a smaller, though still significant, portion.

Changes in revenue streams can arise from various factors. These may include:

• Regulatory changes: Adjustments to rates or regulations can impact revenue.
• Weather patterns: Extreme weather can drive increased energy consumption.
• Economic conditions: Economic growth or recession can affect demand from commercial and industrial customers.
• Infrastructure investments: Investments in new infrastructure can expand service capabilities and revenue potential.

Here's an overview of Black Hills Corporation's revenue and net income figures for recent years:

This data illustrates the revenue trend and overall profitability of Black Hills Corporation over the past five years.

Black Hills Corporation (BKH) Profitability Metrics

Understanding Black Hills Corporation's (BKH) financial health requires a close examination of its profitability metrics. This analysis covers gross profit, operating profit, and net profit margins, their trends over time, and a comparison against industry averages. Additionally, it includes an assessment of operational efficiency, focusing on cost management and gross margin trends.

Here's a detailed breakdown:

• Gross Profit Margin: Black Hills Corporation has maintained a median gross profit margin of 36.2% from fiscal years ending December 2020 to 2024.
• Operating Margin: As of March 2025 (TTM), the operating margin for Black Hills is 15.03%. In 2023, the company had an operating margin of 12.94%, reflecting an increase of 11.53%.
• Net Profit Margin: In 2024, Black Hills Corporation's net income available for common stock was $273.1 million, compared to $262.2 million in the previous year, with earnings per share remaining stable at $3.91.

A look at the operating income for the years ending December 31:

Several factors influenced Black Hills Corporation's profitability in 2024:

• Earnings Growth: The company's earnings per share (EPS) for 2024 was $3.91, a 4.3% increase from the midpoint of the 2023 earnings guidance. The company projects EPS to be between $4.00 and $4.20 per share for 2025.
• Revenue: For the fiscal year, Black Hills Corporation reported total revenue of $2,127.7 million, down from $2,331.3 million the previous year. The decrease in revenue was attributed to lower fuel and purchased power costs, which also led to a decrease in operating expenses.
• Expense Management: Significant expense management measures helped offset the impacts of mild weather, unplanned generation outages, and higher insurance expenses.
• Rate Changes: Earnings of $3.91 per share for 2024 benefited from $0.82 per share of new rates, rider recovery, and customer growth.
• Capital Investments: The company invested approximately $800 million in electric and gas infrastructure.

Black Hills Corporation is focused on expanding its infrastructure and has several projects underway:

• Capital Expenditure: Capital expenditures totaled $744.2 million for the year, including projects aimed at modernizing and expanding their utility infrastructure.
• Clean Energy Plan: Colorado Electric received final approval of its Clean Energy Plan from the Colorado Public Utilities Commission for 350 megawatts of new renewable generation resources.
• Renewable Natural Gas: The company purchased a renewable natural gas (RNG) production facility at a landfill in Dubuque, Iowa.

Black Hills Corporation is also committed to reducing greenhouse gas emissions, with goals to reduce emissions intensity for its Electric Utilities by 40% by 2030 and 70% by 2040.

For more insights into the company's values, see Mission Statement, Vision, & Core Values of Black Hills Corporation (BKH).

Black Hills Corporation (BKH) Debt vs. Equity Structure

Understanding how Black Hills Corporation (BKH) finances its operations and growth is crucial for investors. This involves analyzing its debt levels, debt-to-equity ratio, and recent financing activities.

Here’s a detailed look at Black Hills Corporation's debt versus equity structure:

• Overview of Debt Levels:

As of December 2024, Black Hills Corp. had approximately $4.38 billion in debt. This figure comprises both short-term and long-term obligations.

• Short-Term Debt:

For the quarter that ended in September 2024, Black Hills's Short-Term Debt & Capital Lease Obligation was $18 million.

• Long-Term Debt:

For the quarter that ended in September 2024, Black Hills's Long-Term Debt & Capital Lease Obligation was $4.249 billion.

• Debt-to-Equity Ratio:

The debt-to-equity ratio is a key metric for assessing a company's financial leverage. For Black Hills, the debt-to-equity ratio as of December 31, 2024, was 1.25. Compared to the Utilities - Regulated industry median of 0.89, Black Hills's ratio is higher, ranking worse than 61.82% of companies in the same industry.

Here's a quick breakdown of how the debt-to-equity ratio is calculated for Black Hills:

Debt to Equity = Total Debt / Total Stockholders Equity = (Short-Term Debt & Capital Lease Obligation + Long-Term Debt & Capital Lease Obligation) / Total Stockholders Equity = (133.8 + 4250.2) / Total Stockholders Equity.

• Recent Debt Issuances and Credit Ratings:

In May 2024, Black Hills completed a public debt offering of $450 million, with 6.00% senior unsecured notes due January 15, 2035. The proceeds were used for general corporate purposes and to repay $600 million in notes due August 23, 2024.

Black Hills has maintained solid investment-grade credit ratings. As of early 2025:

• S&P Global Ratings affirmed Black Hills's issuer credit rating at BBB+ with a stable outlook on May 9, 2024.
• Moody's Investor Service affirmed Black Hills's long-term issuer rating at Baa2 with a stable outlook on January 8, 2025.
• Fitch affirmed Black Hills's long-term issuer rating at BBB+ with a negative outlook on January 17, 2025, but the rating was subsequently withdrawn.

• Balancing Debt and Equity:

In 2024, Black Hills issued a total of 3.3 million shares of new common stock, generating net proceeds of $182 million. These funds are earmarked for capital expenditures and general corporate purposes. This move aligns with their capital structure strategy, which often involves a mix of debt and equity to fund growth and maintain financial stability.

Several rate review settlements in 2024 incorporated specific capital structures:

• Arkansas Gas: 54% debt and 46% equity.
• Iowa Gas: One settlement provided for a capital structure of 49% debt and 51% equity.

Black Hills aims to maintain a balanced approach to financing, as evidenced by their long-term capitalization target of 55% debt. The company's strategy includes managing debt levels relative to earnings, as indicated by a debt to EBITDA ratio of 5.7.

To delve deeper into the company's core values, check out Mission Statement, Vision, & Core Values of Black Hills Corporation (BKH).

Black Hills Corporation (BKH) Liquidity and Solvency

When evaluating a company's financial health, liquidity and solvency are key factors to consider. Liquidity refers to the ability of a company to meet its short-term obligations, while solvency assesses its ability to meet long-term liabilities. Let's delve into Black Hills Corporation's (BKH) liquidity position based on recent financial data.

Before diving into the specifics, explore more about Black Hills Corporation and its investors: Exploring Black Hills Corporation (BKH) Investor Profile: Who’s Buying and Why?

Assessing Black Hills Corporation's Liquidity

Analyzing BKH's liquidity involves looking at several key metrics and financial statements.

• Current and Quick Ratios: These ratios provide a snapshot of BKH's ability to cover its short-term liabilities with its short-term assets.
• Working Capital Trends: Monitoring the trend in working capital helps to understand if BKH is efficiently managing its current assets and liabilities.
• Cash Flow Statements Overview: Examining the cash flow statement reveals how BKH generates and uses cash from its operations, investments, and financing activities.

Liquidity Positions

As of December 27, 2024, Black Hills Corporation's current ratio is 1.12. This is calculated by dividing total current assets of $599.5 million by total current liabilities of $536.2 million. This represents a 27.56% improvement from its 12-month average of 0.88. A current ratio above 1 generally indicates that a company has enough short-term assets to cover its short-term liabilities.

The quick ratio for the Trailing 12 Months (TTM) ending September 30, 2024, is not available (NA).

Working Capital Trends

As of September 30, 2024, Black Hills Corporation had a working capital of $599.5 million. Working capital is an important measure of a company's liquidity and its ability to fund its short-term operations.

Cash Flow Statements Overview

An overview of Black Hills Corporation's cash flow statements provides insights into the company's cash generation and usage.

• Operating Activities: For the quarter ending November 7, 2024, cash provided by operating activities was $566.1 million.
• Investing Activities: Cash used in investing activities was $532.0 million.
• Financing Activities: Cash used in financing activities was $107.5 million.

The free cash flow as of December 31, 2024, was -$24.9 million.

Potential Liquidity Concerns or Strengths

While the current ratio suggests a healthy liquidity position, it's important to consider the context of the industry and the company's specific circumstances. Some factors to consider:

• Debt Levels: As of December 2024, Black Hills had $4.38 billion of debt.
• Liabilities: The company had liabilities totaling $6.05 billion more than its cash and near-term receivables.
• Capital Investments: Black Hills has been making significant capital investments, with an $800 million capital investment for 2024 on track and a five-year plan totaling $4.3 billion. The five-year capital forecast is increasing by 10% to $4.7 billion for 2025 through 2029, including $1.0 billion for 2025.

Black Hills has a rather high debt to EBITDA ratio of 5.7, which suggests a meaningful debt load. However, its interest coverage of 2.9 is reasonably strong, which is a good sign. The good news is that Black Hills improved its EBIT by 6.6% over the last twelve months, thus gradually reducing its debt levels relative to its earnings.

In summary, while Black Hills Corporation exhibits a satisfactory current ratio and positive cash flow from operating activities, investors should monitor its debt levels, capital expenditure plans, and free cash flow to ensure sustained financial health.

Black Hills Corporation (BKH) Valuation Analysis

Assessing whether Black Hills Corporation (BKH) is overvalued or undervalued requires a multifaceted approach, incorporating key financial ratios, stock performance analysis, and analyst sentiment. Let's delve into these aspects to provide a clearer picture of BKH's valuation.

Several key financial ratios help in determining valuation:

• Price-to-Earnings (P/E) Ratio: This ratio indicates how much investors are willing to pay for each dollar of earnings.
• Price-to-Book (P/B) Ratio: This ratio compares a company's market capitalization to its book value, offering insights into whether the stock is trading at a premium or discount to its net asset value.
• Enterprise Value-to-EBITDA (EV/EBITDA) Ratio: This ratio provides a more comprehensive valuation measure by considering a company's debt and cash, relative to its earnings before interest, taxes, depreciation, and amortization (EBITDA).

Currently, detailed 2024 fiscal year data for these specific ratios is not available in the search results. For the most up-to-date figures, consulting financial data providers such as Yahoo Finance, Bloomberg, or Reuters is recommended.

Analyzing Black Hills Corporation's stock price trends over the past year provides context on market sentiment and performance:

As of April 21, 2025, specific stock price trends over the last 12 months cannot be directly sourced from the provided search results. To gain insights into BKH's stock performance, reviewing historical stock charts and financial news articles on reputable financial websites is essential.

Dividend yield and payout ratios are crucial for income-focused investors. As of now, real-time 2024 fiscal year data is not available in the search results. Reviewing BKH's investor relations page or financial news sources will provide the most accurate dividend information.

Analyst consensus on Black Hills Corporation's stock valuation offers a consolidated view of expert opinions:

Up-to-date analyst ratings (buy, hold, or sell) and price targets are best found on financial analysis platforms. These ratings reflect collective expectations regarding the stock's future performance.

For additional insights into Black Hills Corporation, consider exploring their Mission Statement, Vision, & Core Values of Black Hills Corporation (BKH).

Black Hills Corporation (BKH) Risk Factors

Black Hills Corporation (BKH) faces a variety of risks that could significantly impact its financial health. These risks span internal operational challenges and external market forces. Investors need to be aware of these potential pitfalls to make informed decisions.

Here's an overview of some key risk areas:

• Industry Competition: The energy sector is highly competitive. Black Hills Corporation competes with other utilities, energy service providers, and companies developing alternative energy sources. Increased competition could pressure profit margins and limit growth opportunities.
• Regulatory Changes: The energy industry is heavily regulated. Changes in regulations at the federal, state, and local levels can impact Black Hills Corporation's operations, investments, and financial performance. This includes regulations related to environmental protection, rate structures, and safety standards.
• Market Conditions: Economic downturns, fluctuations in energy prices, and changes in customer demand can all impact Black Hills Corporation's financial results. For example, a decrease in natural gas prices could reduce revenues from its natural gas operations.

Analyzing recent earnings reports and filings is crucial for identifying specific risks highlighted by the company itself. These reports often contain detailed discussions of operational, financial, and strategic risks.

Examples of risks discussed in filings might include:

• Operational Risks: These can include risks related to the operation of power plants, transmission lines, and distribution systems. Equipment failures, natural disasters, and cyberattacks can disrupt operations and lead to increased costs.
• Financial Risks: These risks relate to the company's ability to manage its debt, access capital markets, and maintain adequate cash flow. Changes in interest rates, credit ratings, and investor sentiment can all impact its financial position.
• Strategic Risks: These risks involve the company's ability to execute its strategic plans, adapt to changing market conditions, and make sound investment decisions. This could include risks related to acquisitions, divestitures, or new business ventures.

Black Hills Corporation actively develops and implements mitigation strategies to address these risks. These strategies may include:

• Investing in infrastructure upgrades to improve reliability and reduce the risk of equipment failures.
• Implementing cybersecurity measures to protect against cyberattacks.
• Diversifying its energy portfolio to reduce its reliance on any one fuel source.
• Hedging strategies to manage commodity price risk.
• Maintaining strong relationships with regulators and policymakers.

Understanding these risks and mitigation strategies is essential for investors seeking to assess the long-term financial health of Black Hills Corporation. For more insights into the company's investor profile, consider reading: Exploring Black Hills Corporation (BKH) Investor Profile: Who’s Buying and Why?

Black Hills Corporation (BKH) Growth Opportunities

Black Hills Corporation (BKH) faces several growth opportunities driven by strategic initiatives and market conditions. A key element of their strategy involves investments in infrastructure projects, particularly in their utilities segments, to enhance reliability and cater to expanding customer bases.

Key growth drivers for Black Hills Corporation include:

• Infrastructure Investments: Ongoing investments in utility infrastructure projects ensure reliable service and accommodate customer growth.
• Regulatory Support: Constructive regulatory environments that allow for cost recovery and incentivize investments in infrastructure improvements.
• Renewable Energy Expansion: Capitalizing on the increasing demand for renewable energy through investments in wind, solar, and other renewable energy projects.
• Customer Growth: Expanding customer base in key service territories, driven by economic development and population growth.

Future revenue growth projections and earnings estimates for Black Hills Corporation are influenced by several factors. Analysts' estimates provide a forward-looking view, but it's important to note that these are subject to change based on market conditions and company performance. For instance, Black Hills Corporation’s long-term earnings are projected to grow, supported by consistent investments and operational efficiencies.

Strategic initiatives and partnerships that may drive future growth include:

• Technology Upgrades: Implementing advanced technologies to improve grid management, enhance customer service, and increase operational efficiency.
• Strategic Acquisitions: Pursuing strategic acquisitions to expand their service territory or add complementary business lines.
• Community Engagement: Engaging with local communities and stakeholders to foster positive relationships and support sustainable development.

Black Hills Corporation possesses several competitive advantages that position it for sustained growth:

• Diversified Operations: A mix of regulated utilities and non-regulated businesses provides stability and growth opportunities.
• Geographic Footprint: A strong presence in attractive service territories with favorable demographics and economic conditions.
• Regulatory Expertise: A deep understanding of regulatory frameworks and a track record of constructive engagement with regulatory bodies.
• Operational Efficiency: A focus on operational efficiency and cost management to drive earnings growth and enhance shareholder value.

To give a clearer picture, consider the following overview of Black Hills Corporation's financial performance:

These figures highlight Black Hills Corporation's robust financial health and ongoing investments in future growth. For more detailed insights, you can explore: Breaking Down Black Hills Corporation (BKH) Financial Health: Key Insights for Investors.