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Here's Why You Should Add Black Hills (BKH) in Your Portfolio

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Black Hills Corporation’s (BKH - Free Report) systematic investments, industrial demand and customer growth will continue to boost its performance.

Let’s focus on the factors that make this stock an appropriate pick.

Zacks Rank & Long-Term Price Performance

Black Hills currently holds a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

The company’s shares have gained 31.3% in the past three years compared with the industry’s rise of 25.7%.

Growth Projections

The Zacks Consensus Estimate for Black Hills’s 2020 earnings is pegged at $3.71 per share on revenues of $1.91 billion. The bottom-line projection suggests an increase of 14.86% on a year-over-year basis.  The same for the top line calls for a 7.50% rise year on year.

The company’s long-term (three to five years) earnings growth is pegged at 3.90%.

Systematic Investments

The company expects to spend $2.9 billion capital through 2019-2023 time period.  It plans to invest $623 million in 2020, $543 million in 2021, $475 million in 2022 and $467 million in 2023. The plan primarily focuses on projects and initiatives that maintain safety and reliability as well as drive customer growth.

Dividend Yield

The company has been paying out dividend to its shareholders on a continuous basis. It has increased 12 cents dividend in both 2018 and 2019 which reflects 49 consecutive years of dividend payment. The company’s targeted annual payout ratio is 50-60% of earnings. Currently, Black Hills has a dividend yield of 2.64% compared with the Zacks S&P 500 composite’s 1.73%.

Other Stocks to Consider

Few other top-ranked stocks from the same industry are Edison International (EIX - Free Report) , Entergy Corporation (ETR - Free Report) and Pacific Gas & Electric Co. (PCG - Free Report) . All the stocks carry a Zack Rank of 2.

Edison, Entergy and Pacific Gas & Electric have four-quarter positive earnings surprise of 0.09%, 4.79% and 17.53%, on average, respectively.

The long-term earnings growth rates for Edison, Entergy and Pacific Gas & Electric are pegged at 5.30%, 7% and 2.50%, respectively.

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