Comparing Eversource Energy (ES) and Black Hills (BKH)

Eversource Energy (NYSE:ES) and Black Hills (NYSE:BKH) are both utilities companies, but which is the superior stock? We will compare the two companies based on the strength of their analyst recommendations, risk, valuation, dividends, profitability, earnings and institutional ownership.

Analyst Ratings

This is a breakdown of current recommendations and price targets for Eversource Energy and Black Hills, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Eversource Energy 0 5 7 0 2.58
Black Hills 1 4 2 0 2.14

Eversource Energy currently has a consensus target price of $63.22, indicating a potential upside of 4.40%. Black Hills has a consensus target price of $60.43, indicating a potential upside of 5.52%. Given Black Hills’ higher possible upside, analysts clearly believe Black Hills is more favorable than Eversource Energy.

Profitability

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

Net Margins Return on Equity Return on Assets
Eversource Energy 12.59% 9.07% 2.81%
Black Hills 13.90% 10.40% 2.94%

Risk & Volatility

Eversource Energy has a beta of 0.24, meaning that its stock price is 76% less volatile than the S&P 500. Comparatively, Black Hills has a beta of 0.37, meaning that its stock price is 63% less volatile than the S&P 500.

Earnings & Valuation

This table compares Eversource Energy and Black Hills’ top-line revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Eversource Energy $7.75 billion 2.48 $987.99 million $3.11 19.47
Black Hills $1.68 billion 1.83 $177.03 million $3.36 17.04

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

Dividends

Eversource Energy pays an annual dividend of $2.02 per share and has a dividend yield of 3.3%. Black Hills pays an annual dividend of $1.90 per share and has a dividend yield of 3.3%. Eversource Energy pays out 65.0% of its earnings in the form of a dividend. Black Hills pays out 56.5% of its earnings in the form of a dividend. Both companies have healthy payout ratios and should be able to cover their dividend payments with earnings for the next several years. Eversource Energy has raised its dividend for 2 consecutive years and Black Hills has raised its dividend for 48 consecutive years.

Insider & Institutional Ownership

73.3% of Eversource Energy shares are held by institutional investors. Comparatively, 99.7% of Black Hills shares are held by institutional investors. 0.5% of Eversource Energy shares are held by company insiders. Comparatively, 1.1% of Black Hills shares are held by company insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a company will outperform the market over the long term.

Summary

Black Hills beats Eversource Energy on 10 of the 17 factors compared between the two stocks.

About Eversource Energy

Eversource Energy, a public utility holding company, engages in the energy delivery business. The company operates in three segments: Electric Distribution, Electric Transmission, and Natural Gas Distribution. It is involved in the transmission and distribution of electricity; and distribution of natural gas. The company operates water regulated utilities. It also provides water services to approximately 226,000 customers. It serves residential, commercial, industrial, municipal, fire protection, and other customers in Connecticut, Massachusetts, and New Hampshire, the United States. The company was formerly known as Northeast Utilities and changed its name to Eversource Energy in April 2015. Eversource Energy was founded in 1927 and is based in Springfield, Massachusetts.

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.

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