|
|
|
|
|
|
This utility has raised its dividend for 56 straight years, and it now sits one state vote away from doubling its reach. Add a pipeline of data center power demand, and the income case gets a growth kicker.
|
| |
|
| |
|
|
|
Utilities are supposed to be the dull corner of your income portfolio. You collect the check, you ignore the headlines, and you move on with your week.
Every so often, though, a boring utility lines up three catalysts at once: a merger close, a wave of new power demand, and a dividend record few companies can match. When that happens, it is worth your attention.
Black Hills Corp. (NYSE: BKH) is based in Rapid City, South Dakota, and serves 1.37 million natural gas and electric customers across Arkansas, Colorado, Iowa, Kansas, Montana, Nebraska, South Dakota, and Wyoming.
Its market value sits near $6 billion, and its board has raised the annual dividend for 56 consecutive years, the second-longest streak in the electric and natural gas industry, so you are buying a payout with a long memory.
Action: Start a position in the Buy Zone listed in the Action Recap below, and add on pullbacks rather than chasing strength.
Beyond GLP-1 (Sponsored)
Peptides are the body's own signaling molecules, re-engineered into precise, scalable medicines.
They are the technology behind today's GLP-1 treatments and a growing pipeline of therapies well beyond obesity.
Explore PEPT
A Merger With One Box Left to Check
On August 19, 2025, Black Hills and NorthWestern Energy Group (NASDAQ: NWE) agreed to combine in a tax-free, all-stock deal.
NorthWestern holders receive 0.98 Black Hills shares for each share they own, and Black Hills holders keep their shares and end up owning about 56% of the combined company, so if you buy Black Hills today, you are buying the controlling side of the deal.
Almost every hurdle is cleared. Shareholders of both companies approved the deal, the Hart-Scott-Rodino antitrust waiting period ended, and the Federal Energy Regulatory Commission (FERC) and the Nebraska and South Dakota commissions all signed off.
The last step is Montana: the companies said on October 22 that the Montana Public Service Commission (PSC) is expected to consider the merger before November 12, which gives you a dated catalyst after this issue lands.
If Montana approves, Black Hills becomes Bright Horizon Energy Corporation and trades on the NYSE under the ticker HZN.
Together with NorthWestern's roughly 850,000 customers, you would own a regional utility serving about 2.2 million customers in the same eight-state footprint.
|
| |
|
| |
|
|
|
Data Centers Are Showing Up in Wyoming
The bigger long-term story is power demand.
Black Hills says it has a large-load pipeline of more than 3 gigawatts (GW) in Wyoming, and its current financial plan already includes 600 megawatts (MW) by 2030, driven by Microsoft's expansion of existing operations and Meta's new AI data center.
You get that growth before counting a single new deal.
On top of that, management is working toward definitive agreements to serve a 1.8 GW data center project in Cheyenne that isn’t in the plan yet.
Wyoming Electric set a new all-time peak load in the second quarter, largely from that large-load growth. For you as an income investor, this matters because new load means new rate base, and rate base is what funds future dividend raises.
Would you rather a company pay its dividend in its own stock (a scrip dividend) during a cash crunch, or cut it to zero, cash and stock alike?
Top Picks (Sponsored)
Only a tiny percentage of stocks meet the criteria for this report.
Analysts have released a new edition highlighting seven names selected using multiple indicators.
Recent picks have delivered notable short-term gains, though results can vary.
The latest report is now available for a limited time.
Download the free report today.
*This free resource is being sent by Zacks. We identify investment resources you may choose to use in making your own decisions. Use of this resource is subject to the Zacks Terms of Service.
*Past performance is no guarantee of future results. Investing involves risk. This material does not constitute investment, legal, accounting, or tax advice. Zacks Investment Research is not a licensed dealer, broker, or investment adviser.
The Numbers Behind the Dividend
Second-quarter adjusted earnings per share (EPS) came in at $0.54, up from $0.38 a year earlier, as new rates and rider recovery more than offset higher financing and depreciation costs.
That is the kind of steady climb you want from a utility. Management reaffirmed 2026 adjusted EPS guidance of $4.25 to $4.45, up from $4.10 in 2025, and expects to land in the upper half of its 4% to 6% long-term EPS growth target.
The quarterly dividend is $0.703 per share, or $2.812 a year, after the January increase. That works out to a yield of about 3.4% and a payout of roughly 65% of the midpoint of 2026 guidance.
That leaves you room for raises without stretching the payout.
Action: Treat Black Hills as a core income holding and reinvest the dividend while the merger and data center deals play out.
The Risks You Need to Respect
The first risk is Montana. Regulators can approve the deal with conditions that cut into the savings, or reject it outright, and the companies have said completion depends on a satisfactory final approval.
A bad outcome would leave Black Hills as a smaller standalone company and could weigh on your shares.
The second risk is cash. In 2025, Black Hills generated $673 million of operating cash flow but spent $820 million on capital projects, so the dividend and the building program lean on debt and stock sales.
Long-term debt rose from $4.25 billion at the end of 2024 to $4.70 billion at the end of 2025, and higher interest costs are already a drag on earnings. If data center agreements slip or shrink, you lose the growth that justifies that spending.
Debt Stealth Tax (Sponsored)
The national debt just crossed $40 trillion.
Your share: roughly $117,000.
See how that math works.
No invoice is coming.
Washington collects at the grocery store, the gas pump, and your retirement account's buying power.
Here's what you can do about it.
Central banks are buying gold at twice the pace of a decade ago.
A complimentary U.S. Gold Bureau guide explains what they bought.
Claim your complimentary guide here.
*This is an advertisement. If you no longer wish to receive promotional emails, please unsubscribe here or write to: 203 Heritage Grove Road, Leander, TX 78641
Putting It All Together
Black Hills gives you a 56-year record of dividend increases, a yield near 3.4%, and earnings guidance that is moving in the right direction.
Two dated events sit right in front of you: third-quarter results after the close on Wednesday, November 4, with a call at 11 AM ET on November 5, and the Montana PSC's expected decision before November 12.
If both go well, you own a larger utility with a growing data center pipeline and a dividend that has every reason to keep climbing.
If Montana says no, you still own a dependable dividend raiser with its own Wyoming growth story.
Action Recap
✅ Buy Zone: $76 to $82
✅ Catalysts to Watch: Q3 earnings November 4 after the close, Montana PSC merger decision expected before November 12, Cheyenne data center agreements, and the next dividend increase in January
✅ Medium-Term Target: $90 to $95 over 12 to 18 months
✅ Risk Management Tip: Reassess below $72, or if Montana rejects the merger
Setup Scorecard
Entry Zone: $76 to $82
Target: $90 to $95 over 12 to 18 months
Stop Loss: Reassess below $72
Catalyst Timeline: Q3 earnings November 4, Montana PSC vote expected before November 12, and merger close targeted by year-end 2026
Confidence Level: Medium-High. The dividend record and guidance are solid, and the main swing factor is the Montana decision.
That’s all for today’s edition of the Dividend Brief.
Thanks for reading, and if you have any feedback or dividend stocks you want me to take a look at, just reply to this email!
—Noah Zelvis
DividendBrief.com
