Black Hills (BKH) versus Nextera Energy Partners (NEP) Financial Comparison

Black Hills (NYSE: BKH) and Nextera Energy Partners (NYSE:NEP) are both mid-cap utilities companies, but which is the better business? We will contrast the two companies based on the strength of their profitability, institutional ownership, analyst recommendations, risk, dividends, earnings and valuation.

Insider and Institutional Ownership

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98.2% of Black Hills shares are owned by institutional investors. Comparatively, 83.2% of Nextera Energy Partners shares are owned by institutional investors. 1.1% of Black Hills shares are owned by company insiders. Comparatively, 0.5% of Nextera Energy Partners shares are owned by company insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a stock is poised for long-term growth.

Risk and Volatility

Black Hills has a beta of 0.52, indicating that its share price is 48% less volatile than the S&P 500. Comparatively, Nextera Energy Partners has a beta of 1.2, indicating that its share price is 20% more volatile than the S&P 500.

Analyst Ratings

This is a breakdown of recent ratings and target prices for Black Hills and Nextera Energy Partners, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Black Hills 0 4 4 0 2.50
Nextera Energy Partners 0 3 8 0 2.73

Black Hills presently has a consensus price target of $64.13, suggesting a potential upside of 19.21%. Nextera Energy Partners has a consensus price target of $42.18, suggesting a potential upside of 7.50%. Given Black Hills’ higher probable upside, equities research analysts plainly believe Black Hills is more favorable than Nextera Energy Partners.

Profitability

This table compares Black Hills and Nextera Energy Partners’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Black Hills 10.83% 10.10% 2.78%
Nextera Energy Partners -8.63% 1.80% 0.47%

Earnings and Valuation

This table compares Black Hills and Nextera Energy Partners’ gross revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Black Hills $1.68 billion 1.71 $177.03 million $3.36 16.01
Nextera Energy Partners $807.00 million 2.64 -$62.00 million $0.66 59.45

Black Hills has higher revenue and earnings than Nextera Energy Partners. Black Hills is trading at a lower price-to-earnings ratio than Nextera Energy Partners, indicating that it is currently the more affordable of the two stocks.

Dividends

Black Hills pays an annual dividend of $1.90 per share and has a dividend yield of 3.5%. Nextera Energy Partners pays an annual dividend of $1.62 per share and has a dividend yield of 4.1%. Black Hills pays out 56.5% of its earnings in the form of a dividend. Nextera Energy Partners pays out 245.5% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Black Hills has raised its dividend for 48 consecutive years and Nextera Energy Partners has raised its dividend for 2 consecutive years.

Summary

Black Hills beats Nextera Energy Partners on 11 of the 17 factors compared between the two stocks.

About Black Hills

Black Hills Corporation, through its subsidiaries, operates as a vertically-integrated utility company in the United States. The company's Electric Utilities segment generates, transmits, and distributes electricity to approximately 210,000 electric customers in South Dakota, Wyoming, Colorado, and Montana. This segment owns 941 megawatts of generation capacity and 8,839 miles of electric transmission and distribution lines. Its Gas Utilities segment distributes natural gas to approximately 1,042,000 natural gas utility customers in Arkansas, Colorado, Iowa, Nebraska, Kansas, and Wyoming. This segment owns 4,656 miles of intrastate gas transmission pipelines and 40,455 miles of gas distribution mains and service lines; 7 natural gas storage sites; and approximately 45,000 horsepower of compression and 600 miles of gathering lines. The company's Power Generation segment produces electric power and sells the electric capacity and energy primarily to its utilities under long-term contracts. Its Mining segment produces coal at its coal mine located near Gillette, Wyoming and sells the coal to electric generation facilities. The company also provides appliance repair services to approximately 63,000 residential customers; and constructs and maintains gas infrastructure facilities and electrical systems for gas transportation and electric utilities customers. Black Hills Corporation was founded in 1941 and is headquartered in Rapid City, South Dakota.

About Nextera Energy Partners

Nextera Energy Partners, LP is a limited partnership formed to acquire, manage and own contracted clean energy projects. The Company, through its limited partnership interest in NextEra Energy Operating Partners, LP (NEP OpCo), owns a portfolio of contracted renewable generation assets consisting of wind and solar projects, as well as contracted natural gas pipeline assets. The Company’s primary business objective is to invest in contracted clean energy projects. As of December 31, 2016, the Company’s project portfolio of clean, contracted renewable energy assets (initial portfolio) included approximately 989 megawatts (MW) of wind and solar energy generating facilities located in the United States and Canada. As of December 31, 2016, the Company’s portfolio included Genesis, Northern Colorado, Tuscola Bay, Elk City, Perrin Ranch, Bluewater, Moore, Sombra, Shafter, Palo Duro, Stateline, Mammoth Plains, Jericho, Cedar Bluff Wind and Golden Hills Wind.

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