Updated on July 8th, 2025 by Felix Martinez
Companies that have at least 50 years of dividend growth are considered Dividend Kings.
The majority of the Dividend Kings list comprises large companies, such as Procter & Gamble (PG), Coca-Cola (KO), and Johnson & Johnson (JNJ).
However, there are also a number of small-cap and mid-cap Dividend Kings. For example, Black Hills Corporation (BKH) is a member of the Dividend Kings list, but its market cap is below $4.1 billion. This shows that smaller companies can maintain equally impressive streaks of dividend growth.
You can download an Excel spreadsheet with the full list of all 55 Dividend Kings (plus important metrics such as price-to-earnings ratios and dividend yields) by clicking on the link below:
As a well-run utility stock with a recession-resistant business model, investors can expect Black Hills to continue increasing its dividend each year.
This article will discuss Black Hills’ business model, growth prospects, and valuation to determine whether shares are worth purchasing now.
Business Overview
Black Hills Corporation is an electric utility that provides electricity and natural gas to customers in Arkansas, Colorado, Iowa, Kansas, Montana, Nebraska, South Dakota, and Wyoming. The company was founded in 1941 and is headquartered in Rapid City, South Dakota.
The company has 1.34 million utility customers in eight states. Its natural gas assets include 49,200 miles of natural gas lines. Separately, it has ~9,200 miles of electric lines and 1.4 gigawatts of electric generation capacity.
Source: Investor Presentation
Utility stocks are typically purchased for their stable profits and low volatility. Black Hills is no exception, as over 90% of its assets are regulated. It is also diversified, split between complementary natural gas and electric utility businesses.
Growth Prospects
Black Hills has generated strong growth for a utility. Overall, earnings per share grew by 4.6% annually from 2014 to 2024. Going forward, we expect more modest EPS growth of 4% per year over the next five years, which would be more in line with a typical utility stock.
Black Hills’ growth over the coming years depends on several factors. This includes rate reviews, which drive revenues and profits per kWh.
Another factor is the expansion of the company’s existing assets via new utility infrastructure. Black Hills regularly adds new projects to its growth investment backlog, currently at $4.7 billion from 2025 through 2029.
The company believes its investments will bring future growth.
Source: Investor Presentation
Black Hills’ planned growth investments include new electric transmission lines and new natural gas pipelines to service its customers.
Rate reviews will enable Black Hills to recover investments in its existing systems, thereby almost guaranteeing increased revenues, which should lead to rising profits in the future.
In 2018, Black Hills exited its oil business, which means that the company is now less impacted by changes in commodity prices. Focusing on its core utility business will likely be a positive for Black Hills going forward. We forecast 4% annual earnings-per-share growth over the next five years.
Competitive Advantages & Recession Performance
To become a Dividend King, a company must inherently possess durable competitive advantages that enable it to outlast competitive threats and continue to perform well during economic downturns.
This remains true for Black Hills. Demand for electricity and gas is not overly cyclical, although it is somewhat dependent upon weather conditions.
Thus, Black Hills should remain profitable under most circumstances, allowing the company to raise its dividend for decades.
Source: Investor Presentation
The fact that customers tend to stick with their provider means that Black Hills operates a relatively stable business model. The company should also be able to weather future recessions well, which creates appeal for more conservative investors.
Another competitive advantage is the company’s strong financial position, as evidenced by its robust balance sheet. Black Hills has a high credit rating of BBB+ from Standard & Poor’s and Fitch, which helps reduce its capital cost.
Black Hills scores highly in terms of dividend safety due to its competitive advantages and defensive business model. The company aims to distribute 50% to 60% of its net profits as dividends, which is a healthy payout ratio.
Valuation & Expected Returns
Black Hills stock currently has a price-to-earnings ratio of 14, based on expected 2025 earnings per share of $4.10.
Our fair value estimate for Black Hills stock is a P/E ratio of 17, which we believe is a reasonable valuation multiple for a utility company. Therefore, shares appear to be undervalued right now.
If the P/E ratio expands from 14 to 17 over the next five years, shareholder returns will be boosted by 4% annually. Future earnings-per-share growth and dividend payments will also enhance shareholders’ returns.
As previously mentioned, we expect a 4% annual EPS growth. The stock also boasts a 4.8% current dividend yield, resulting in total expected returns of 12.8% per year over the next five years.
Final Thoughts
Black Hills is a relatively small utility company, but it has a compelling track record of dividend growth. It has raised its dividend annually for 55 years, and we believe it is highly likely that the company will continue to grow its earnings and dividends in the years to come.
Utilities such as Black Hills traditionally offer investors high stability and dividend safety.
The stock is currently trading below our fair value estimate. It offers an attractive dividend yield and a positive outlook for future growth. Due to its expected annual returns of nearly 12.8%, we rate the stock a buy.
Additional Reading
The following databases of stocks contain stocks with very long dividend or corporate histories, ripe for selection for dividend growth investors.
- The Dividend Aristocrats List: S&P 500 stocks with 25+ years of dividend increases.
- The High Yield Dividend Aristocrats List is comprised of the 20 Dividend Aristocrats with the highest current yields.
- The Dividend Achievers List is comprised of ~350 stocks with 10+ years of consecutive dividend increases.
- The High Yield Dividend Kings List is comprised of the 20 Dividend Kings with the highest current yields.
- The Blue Chip Stocks List: stocks that qualify as Dividend Achievers, Dividend Aristocrats, and/or Dividend Kings
- The High Dividend Stocks List: stocks that appeal to investors interested in the highest yields of 5% or more.
- The Monthly Dividend Stocks List: stocks that pay dividends every month, for 12 dividend payments per year.
- The Dividend Champions List: stocks that have increased their dividends for 25+ consecutive years.
Note: Not all Dividend Champions are Dividend Aristocrats because Dividend Aristocrats have additional requirements like being in The S&P 500. - The Dividend Contenders List: 10-24 consecutive years of dividend increases.
- The Dividend Challengers List: 5-9 consecutive years of dividend increases.
- The Best DRIP Stocks: The top 15 Dividend Aristocrats with no-fee dividend reinvestment plans.
- The High ROIC Stocks List: The top 10 stocks with high returns on invested capital.
- The High Beta Stocks List: The 100 stocks in the S&P 500 Index with the highest beta.
- The Low Beta Stocks List: The 100 stocks in the S&P 500 Index with the lowest beta.
- The Complete List of Russell 2000 Stocks
- The Complete List of NASDAQ-100 Stocks