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Category: Stock Market and Black Hills Corporation
Date: 9 February 2020 Stock Price: $83.91 We take a look at the 4th quarter earnings report of their 2019 fiscal year of Black Hills Corporation a diversified energy company that is an electric and gas utility firm that sells power throughout the American West.
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About Black Hills Corporation
Black Hills Corporation is a Rapid City, South Dakota diversified energy company that is an electric and gas utility in South Dakota and Wyoming and sells power throughout the American West. It derives its name from its home in the Black Hills of South Dakota.
Overview of Black Hills Corporation 4th quarter 2019 earnings report
The data below refers to the latest quarter's data (unless specified otherwise)
The summary below shows the operating income earned by Black Hills Corporation 's various divisions (in $ millions)
So the bulk of Black Hills operating income for the 4th quarter 2019 came from Gas Utilities, which contributed more than double to their operating income than their Electric Utilities
- Revenues: $477.7 million
- Fuel, purchased power and cost of gas sold: $157.3 million
- Net income: $69.2 million (down from $86.6 for the same quarter of the previous year)
- Diluted earnings per share: $1.13 (down from $1.49 for the same quarter of the previous year)
- PE ratio of Black Hills Corporation: 25.6
- Number of shares in issue: 61.418 million (up from 58.252 million for the same period of the previous year)
The summary below shows the operating income earned by Black Hills Corporation 's various divisions (in $ millions)
- Electric Utilities: $35.1
- Gas Utilities: $73.4
- Power Generation: $10.8
- Mining: $3.3
- Operating income: $121.4
So the bulk of Black Hills operating income for the 4th quarter 2019 came from Gas Utilities, which contributed more than double to their operating income than their Electric Utilities
Black Hills Corporation (NYSE: BMY) management commentary on 4th quarter 2019 earnings
RAPID CITY, S.D., Feb. 06, 2020 (GLOBE NEWSWIRE) -- Black Hills Corp. (NYSE: BKH) today announced financial results for the fourth quarter and full year 2019.
“We’re pleased with our operational and financial performance in 2019,” said Linn Evans, president and CEO of Black Hills Corp. “Earnings growth was strong, with adjusted net income up 13 percent in the fourth quarter and 9 percent for the full year, compared to the same periods in 2018, offsetting the dilution from new common shares issued in late 2018 and 2019.
“Results benefited from new rates, customer growth, lower purchased power capacity costs and tax credits on new wind generation assets. Weather impacts for the year were favorable compared to normal, but not as favorable as 2018.
“Our team successfully deployed $850 million in capital projects on behalf of customers in 2019. We are confident in our ability to execute on our planned $2.7 billion of safety, integrity and growth projects in 2020 through 2024. These investments are necessary to maintain, upgrade and modernize our large electric and natural gas infrastructure systems across eight states.
“We’re pleased with our operational and financial performance in 2019,” said Linn Evans, president and CEO of Black Hills Corp. “Earnings growth was strong, with adjusted net income up 13 percent in the fourth quarter and 9 percent for the full year, compared to the same periods in 2018, offsetting the dilution from new common shares issued in late 2018 and 2019.
“Results benefited from new rates, customer growth, lower purchased power capacity costs and tax credits on new wind generation assets. Weather impacts for the year were favorable compared to normal, but not as favorable as 2018.
“Our team successfully deployed $850 million in capital projects on behalf of customers in 2019. We are confident in our ability to execute on our planned $2.7 billion of safety, integrity and growth projects in 2020 through 2024. These investments are necessary to maintain, upgrade and modernize our large electric and natural gas infrastructure systems across eight states.
“We are providing innovative energy solutions to meet the evolving needs of our customers and communities. We obtained approval for our subscription-based Renewable Ready program to deliver renewable energy to customers in South Dakota and Wyoming, expanding the program late last year to serve strong customer demand. Our new Busch Ranch II wind project positions us to achieve Colorado’s 30 percent renewable energy standard in 2020. Our Renewable Advantage program further supports Colorado’s emissions reduction goals through the potential addition of up to 200 megawatts of cost-effective renewable energy resources.
“We continued to make progress on the consolidation of our gas utilities. We received approval of a settlement agreement in Wyoming to establish statewide customer rates, consolidate general tariffs and implement an integrity rider. In Nebraska, we completed legal consolidation of our two gas utilities in the state and expect to file a combined rate review to consolidate rate structures by mid-year 2020.
“Our achievements and innovation in 2019 will benefit customers and shareholders alike. Looking forward, we are Ready to grow long-term value as we deliver on our responsibility to serve our customers,” concluded Evans.
2020 EARNINGS GUIDANCE REAFFIRMED
Black Hills is reaffirming its guidance for 2020 earnings per share available for common stock, as adjusted (a non-GAAP measure*), in the range of $3.55 to $3.75, based on the following updated assumptions:
“We continued to make progress on the consolidation of our gas utilities. We received approval of a settlement agreement in Wyoming to establish statewide customer rates, consolidate general tariffs and implement an integrity rider. In Nebraska, we completed legal consolidation of our two gas utilities in the state and expect to file a combined rate review to consolidate rate structures by mid-year 2020.
“Our achievements and innovation in 2019 will benefit customers and shareholders alike. Looking forward, we are Ready to grow long-term value as we deliver on our responsibility to serve our customers,” concluded Evans.
2020 EARNINGS GUIDANCE REAFFIRMED
Black Hills is reaffirming its guidance for 2020 earnings per share available for common stock, as adjusted (a non-GAAP measure*), in the range of $3.55 to $3.75, based on the following updated assumptions:
- Normal weather conditions within our utility service territories including temperatures, precipitation levels and wind conditions;
- Normal operations and weather conditions for planned construction, maintenance and/or capital investment projects;
- Completion of utility regulatory dockets;
- Complete construction and place in service the Corriedale Wind Energy Project by year-end 2020;
- No significant unplanned outages at any of our generating facilities;
- $14 million to $15 million of production tax credits associated with wind generation assets;
- Capital investment of $669 million in 2020;
- $100 million to $120 million of equity issuances in 2020 through our at-the-market equity offering program; and
- No significant acquisitions or divestitures.
Black Hills Corporation (NYSE: BKH) stock price history
The image below obtained from Google, shows the stock price history of Black Hills Corporation over the last 5 years. And its been a pretty good time for Black Hills stockholders. 5 years ago the stock of Black Hills was trading at around $49 a stock and its currently trading at $83.91 a stock. That's a very good return of 71.2% provided to Black Hills stockholders over the last 5 years.
The stock of Black Hills is trading at a lot closer to its 52 week high of $87.12 than it is to its 52 week low of $65.96 a stock, which to us is an indication that the short term sentiment and momentum of Black Hills stock is positive at this point in time.
The stock of Black Hills is trading at a lot closer to its 52 week high of $87.12 than it is to its 52 week low of $65.96 a stock, which to us is an indication that the short term sentiment and momentum of Black Hills stock is positive at this point in time.
Recent coverage of Black Hills Corporation
The extract below discusses the latest regarding Black Hills Corporation as obtained from techknowbits.com
Black Hills Corp (NYSE:BKH)’s share price hit a new 52-week high on Wednesday . The company traded as high as $84.02 and last traded at $83.87, with a volume of 6486 shares traded. The stock had previously closed at $83.03. Several equities analysts recently commented on BKH shares. Bank of America raised shares of Black Hills from a “neutral” rating to a “buy” rating in a research note on Thursday, October 10th.
Zacks Investment Research downgraded shares of Black Hills from a “buy” rating to a “hold” rating in a research note on Tuesday. Finally, Mizuho started coverage on shares of Black Hills in a research note on Friday, November 22nd. They issued a “buy” rating and a $80.00 price objective for the company. Five analysts have rated the stock with a hold rating and two have given a buy rating to the company’s stock. The stock presently has a consensus rating of “Hold” and an average price target of $77.60.
Read the full article here
Black Hills Corp (NYSE:BKH)’s share price hit a new 52-week high on Wednesday . The company traded as high as $84.02 and last traded at $83.87, with a volume of 6486 shares traded. The stock had previously closed at $83.03. Several equities analysts recently commented on BKH shares. Bank of America raised shares of Black Hills from a “neutral” rating to a “buy” rating in a research note on Thursday, October 10th.
Zacks Investment Research downgraded shares of Black Hills from a “buy” rating to a “hold” rating in a research note on Tuesday. Finally, Mizuho started coverage on shares of Black Hills in a research note on Friday, November 22nd. They issued a “buy” rating and a $80.00 price objective for the company. Five analysts have rated the stock with a hold rating and two have given a buy rating to the company’s stock. The stock presently has a consensus rating of “Hold” and an average price target of $77.60.
Read the full article here
Black Hills Corporation (NYSE: BKH) stock valuation
So what do we value Black Hills Corporation stock at after the release of their 4th quarter 2019 earnings and the fiscal guidance provided for the full fiscal 2020? Based on Black Hills Corporation earnings report and fiscal guidance provided our valuation models provides a target price (full value price) for Black Hills Corporation at $70.70 a stock. We therefore believe that the stock of Black Hills Corporation is overvalued.
We usually suggest that long term and fundamental investors get in at least 10% below our target (full value) price which in this case is $70.70 therefore we believe a good entry point into Black Hills Corporation stock is at $63.60 or below. We expect the stock of Black Hills Corporation to pull back from current levels to levels closer to our target price (full value price) in coming weeks and moths as we believe it is overvalued at this point in time.
We therefore rate Black Hills Corporation as a sell
We usually suggest that long term and fundamental investors get in at least 10% below our target (full value) price which in this case is $70.70 therefore we believe a good entry point into Black Hills Corporation stock is at $63.60 or below. We expect the stock of Black Hills Corporation to pull back from current levels to levels closer to our target price (full value price) in coming weeks and moths as we believe it is overvalued at this point in time.
We therefore rate Black Hills Corporation as a sell
Next earnings release of Black Hills Corporation
It is expected that Black Hills Corporation will publish their 1st quarter 2020 earnings report in early May 2020