Contrasting Black Hills (BKH) & Sky Solar (SKYS)

Black Hills (NYSE:BKH) and Sky Solar (NASDAQ:SKYS) are both utilities companies, but which is the better stock? We will compare the two businesses based on the strength of their earnings, analyst recommendations, valuation, institutional ownership, dividends, profitability and risk.

Risk and Volatility

Black Hills has a beta of 0.36, meaning that its stock price is 64% less volatile than the S&P 500. Comparatively, Sky Solar has a beta of 0.97, meaning that its stock price is 3% less volatile than the S&P 500.

Insider and Institutional Ownership

99.7% of Black Hills shares are owned by institutional investors. Comparatively, 0.2% of Sky Solar shares are owned by institutional investors. 1.1% of Black Hills shares are owned by company insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a stock is poised for long-term growth.

Dividends

Black Hills pays an annual dividend of $1.90 per share and has a dividend yield of 3.1%. Sky Solar does not pay a dividend. Black Hills pays out 56.5% of its earnings in the form of a dividend. Black Hills has raised its dividend for 48 consecutive years.

Profitability

This table compares Black Hills and Sky Solar’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Black Hills 13.90% 10.40% 2.94%
Sky Solar N/A N/A N/A

Valuation and Earnings

This table compares Black Hills and Sky Solar’s gross revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Black Hills $1.68 billion 1.99 $177.03 million $3.36 18.53
Sky Solar $56.73 million 4.47 -$33.17 million ($0.80) -0.81

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

Analyst Recommendations

This is a breakdown of recent ratings for Black Hills and Sky Solar, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Black Hills 1 3 3 0 2.29
Sky Solar 0 0 0 0 N/A

Black Hills presently has a consensus target price of $60.86, indicating a potential downside of 2.27%. Given Black Hills’ higher possible upside, research analysts plainly believe Black Hills is more favorable than Sky Solar.

Summary

Black Hills beats Sky Solar on 13 of the 16 factors compared between the two stocks.

Black Hills Company Profile

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.

Sky Solar Company Profile

Sky Solar Holdings, Ltd., an investment holding company, operates as an independent power producer worldwide. The company develops, owns, and operates solar parks primarily in the downstream solar market. It also sells solar energy systems, including pipeline; and engineering, construction, and procurement services, as well as engages in building and transferring solar parks. As of December 31, 2017, the company developed 318 solar parks with an aggregate capacity of 377.2 megawatts (MW) in Japan, Bulgaria, the Czech Republic, Spain, Canada, the United States, and Uruguay; and owned and operated 196.7 MW of solar parks, including 96.3 MW in Japan, 5.6 MW in the Czech Republic, 0.2 MW in Canada, 0.9 MW in Spain, 22.1 MW in the United States, and 71.6 MW in Uruguay. It also had approximately 400 MW of solar projects in various stages of development in countries, such as Chile, Japan, Canada, and the United States comprising 6.6 MW under construction, 180.1 MW of shovel-ready projects, and approximately 250 MW of solar parks in pipeline. The company has strategic partnership agreement with Hudson Clean Energy Partners for investing in renewable power and clean energy. Sky Solar Holdings, Ltd. was founded in 2009 and is headquartered in Admiralty, Hong Kong.

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