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Black Hills Corporation (BKH)

Company Dividend Discount ModelIndustry: Diversified UtilitiesSector: Utilities

Valuation Snapshot

Stable Growth$62.32 - $118.52$84.98
Multi-Stage$60.68 - $66.28$63.43
Blended Fair Value$74.20
Current Price$56.10
Upside32.27%
DecisionDon't Buy

Dividend History & Growth Metrics (10Y)

Metric5Y CAGR10Y CAGR2024202320222021202020192018201720162015
DPS7.90%10.10%2.532.332.172.011.881.731.481.341.211.01
YoY Growth--8.45%7.28%8.07%7.06%8.66%16.94%10.18%10.48%20.61%4.26%
Dividend Yield--4.16%4.33%3.44%2.61%2.81%2.70%2.02%2.47%1.83%1.67%

Stable Growth Model (Adjusted)

(USD in Millions except Per Share Data)
Net Income To Common (M)284.80
(-) Cash Dividends Paid (M)144.10
(=) Cash Retained (M)140.70
MetricLOWBASEHIGH
Required Retention Ratio20.0%12.5%7.5%
(=) Cash Required (M)56.9635.6021.36
Cash Retained (M)140.70140.70140.70
(-) Cash Required (M)-56.96-35.60-21.36
(=) Excess Retained (M)83.74105.10119.34
(/) Shares Outstanding (M)72.1872.1872.18
(=) Excess Retained per Share1.161.461.65
LTM Dividend per Share2.002.002.00
(+) Excess Retained per Share1.161.461.65
(=) Adjusted Dividend3.163.453.65
WACC / Discount Rate9.10%9.10%9.10%
Growth Rate3.84%4.84%5.84%
Fair Value$62.32$84.98$118.52
Upside / Downside11.09%51.48%111.26%

Multi-Stage Model: Projections

(USD in Millions)
MetricTTMDec-27Dec-28Dec-29Dec-30Dec-31Terminal
Net Income (M)284.80298.58313.03328.17344.05360.70371.52
Payout Ratio50.60%58.48%66.36%74.24%82.12%90.00%92.50%
Projected Dividends (M)144.10174.60207.72243.63282.53324.63343.66

Multi-Stage Valuation

MetricLOWBASEHIGH
WACC / Discount Rate9.10%9.10%9.10%
Growth Rate3.84%4.84%5.84%
Year 1 PV (M)158.52160.04161.57
Year 2 PV (M)171.21174.52177.86
Year 3 PV (M)182.30187.62193.04
Year 4 PV (M)191.93199.44207.15
Year 5 PV (M)200.21210.04220.25
PV of Terminal Value (M)3,475.683,646.293,823.54
Equity Value (M)4,379.854,577.954,783.42
Shares Outstanding (M)72.1872.1872.18
Fair Value$60.68$63.43$66.28
Upside / Downside8.17%13.06%18.14%

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