Financial Performance - Black Hills Corp. reported operating income of $82.5 million for Q2 2025, up from $70.6 million in Q2 2024, and net income available for common stock increased to $27.5 million from $22.8 million in the same period [1][19] - Earnings per share (EPS) for Q2 2025 were $2.24, compared to $0.38 in Q2 2024, reflecting a significant increase due to new rates and rider recovery, despite higher operating expenses [1][19] - For the first half of 2025, the company achieved net income of $161.7 million, up from $150.6 million in the first half of 2024 [1][21] Growth Initiatives - The company is executing a $1 billion capital plan for 2025 to support long-term growth and maintain solid financial credit metrics [2] - Key projects include the $350 million Ready Wyoming electric transmission project, expected to be completed by year-end 2025, and the $280 million Lange II generation project in South Dakota, planned to be operational in the second half of 2026 [3][10] - The company anticipates that data centers will contribute over 10% of EPS by 2028, driven by ongoing construction of Meta's new data center in Wyoming [3] Regulatory Developments - Black Hills Corp. reaffirmed its 2025 earnings guidance range of $4.00 to $4.20 per share, based on favorable regulatory outcomes and operational stability [5][10] - The company received approval for new rates at Kansas Gas, providing an additional $10.8 million in annual revenues, and a certificate for a 99-megawatt generation project in South Dakota [5][10] Operational Highlights - Wyoming Electric recorded an all-time peak load of 379 megawatts, reflecting a 21% increase over the previous year's peak, marking 19 consecutive years of rising electric demand [6][5] - The establishment of an Emergency Public Safety Power Shutoff program aims to enhance customer safety and mitigate wildfire risks across all electric utilities [6] Dividend and Share Issuance - The board of directors approved a quarterly dividend of $0.676 per share, marking 55 consecutive years of dividend increases, the second-longest track record in the industry [10] - In Q2 2025, the company issued 0.3 million shares for net proceeds of $20 million, totaling 1.1 million shares for $65 million year-to-date [10]

Core Points - Black Hills Corp.'s natural gas utility subsidiary in Kansas received approval for new rates from the Kansas Corporation Commission, allowing recovery of approximately $118 million in system investments since the last rate filing in 2021 [1][2] - The approved settlement will generate approximately $10.8 million in new annual revenues and migrate about $4.4 million in annual rider revenue to base rates, resulting in a total annual base rate revenue increase of $15.2 million, effective August 1, 2025 [2][3] - The settlement allows the continued use of the Gas System Reliability Surcharge (GSRS) for safety-focused pipeline replacements and includes a new insurance tracker with deferred accounting treatment [3] Company Overview - Black Hills Corp. is a growth-oriented utility company based in Rapid City, South Dakota, serving 1.35 million natural gas and electric utility customers across eight states: Arkansas, Colorado, Iowa, Kansas, Montana, Nebraska, South Dakota, and Wyoming [4]

Core Viewpoint - The utility sector is poised for significant growth due to a surge in electricity demand driven by advancements in artificial intelligence, data centers, and electric vehicles, with a projected increase in demand of 55% over the next 20 years compared to just 9% from 2000 to 2020 [3][4]. Industry Trends - Electricity demand grew by 9% from 2000 to 2020, but is expected to grow by 55% over the next two decades [3]. - The demand for electricity from AI and data centers is projected to increase by 300% in the next decade, while electric vehicles are expected to drive a staggering 9,000% increase in electricity demand by 2050 [4]. - By the middle of the century, electricity is projected to account for 32% of final energy demand, up from 21% [4]. Investment Opportunities - Vanguard Utilities Index Fund ETF (VPU) offers diversified exposure to the utility sector with a yield of approximately 2.8% [6]. - NextEra Energy (NEE) has a strong growth platform with a 10% annualized dividend increase over the past decade and a yield of around 3.2% [7][8]. - The Southern Company (SO) has recently started two nuclear reactors, enhancing its clean energy supply and yielding 3.2% [9]. - Duke Energy (DUK) focuses on regulated utility customer bases, with a dividend yield of about 3.5% [10]. - Dominion Energy (D) has a higher yield of 4.7% but has faced challenges with a dividend cut [11]. - Black Hills Corporation (BKH) has achieved Dividend King status with a yield of 4.8% and a growing customer base [12]. - Constellation Energy (CEG) operates the largest nuclear power fleet in the U.S. but has a lower yield of 0.5% [13]. - Brookfield Renewable offers a diversified clean energy investment with yields of 5.8% for the partnership class and 4.5% for the corporate class [14][15]. - Portland General Electric (POR) has a yield of 5.1% and operates in a region with potential for data centers despite wildfire risks [17]. - Eversource Energy (ES) focuses on regulated utility assets with a yield of approximately 4.7% [18]. Long-term Outlook - The trends driving electricity demand are expected to unfold over decades, presenting opportunities for long-term investors to build wealth as the demand growth story develops [19].

Core Viewpoint - Black Hills Corp. is set to announce its 2025 second-quarter earnings on July 30, 2025, followed by a live conference call on July 31, 2025, to discuss the financial results [1]. Company Overview - Black Hills Corp. (NYSE: BKH) is a growth-oriented utility company based in Rapid City, South Dakota, serving 1.35 million natural gas and electric utility customers across eight states: Arkansas, Colorado, Iowa, Kansas, Montana, Nebraska, South Dakota, and Wyoming [4]. - The company aims to be the energy partner of choice, focusing on improving life with energy [4]. Investor Relations - For inquiries, investors can contact Sal Diaz via email at investorrelations@blackhillscorp.com or reach the 24-hour media relations line at 888-242-3969 [5].

Financial Performance & Growth - Black Hills Corp achieved a solid financial position with a long-term EPS growth target of 4% to 6% off the 2023 base of $3.75 per share[9] - The company targets a 55%-65% dividend payout ratio and has increased its annual dividend for 55 consecutive years[9] - The company is delivering on 2025 earnings guidance, which represents ~5% year-over-year growth, achieving 4%-6% CAGR off 2023 base[11] Capital Investment & Infrastructure - Black Hills Corp has a five-year capital forecast of $4.7 billion for 2025-2029, a 10% increase from the prior five-year plan[11] - The company's capital investment plan includes $2.4 billion for electric utilities and $2.1 billion for gas utilities[93] - The company is undertaking the Ready Wyoming Electric Transmission Initiative, a 260-mile expansion project costing $350 million[33] Data Center & Customer Growth - Black Hills Corp announced 1 GW of data center demand from existing customers, with ~500 MW in the current plan requiring minimal capital[11] - The company expects data center EPS contribution to more than double to 10%+ by 2028[17] - The company's customer count growth is more than double the population growth, with a customer count CAGR of 1.1% from 2019-2024[20, 23] Regulatory & Sustainability - The company is actively executing three to four rate reviews per year, including a filed rate review for Kansas Gas requesting recovery of $17.2 million[11, 18] - Black Hills Corp is committed to reducing GHG emissions intensity 40% by 2030 and 70% by 2040 for electric utilities (2005 baseline)[110] - The company targets Net Zero GHG emissions by 2035 for the natural gas distribution system[110]

Core Viewpoint - Dividend-paying stocks are generally considered lower-risk investments compared to non-payers, as they generate sufficient cash to fund growth and return excess to shareholders through dividends [1] Group 1: Black Hills (BKH) - Black Hills operates as a regulated utility with a monopoly on natural gas distribution and electricity in several states, benefiting from government regulation [5][6] - The company has a growing customer base, expanding at twice the rate of the U.S. population, and has a history of increasing dividends for over five decades, achieving Dividend King status [7] - Expected earnings growth of 4% to 6% and a dividend yield of 4.8% make Black Hills an attractive investment opportunity [8] Group 2: Kinder Morgan (KMI) - Kinder Morgan is one of the largest energy infrastructure platforms in the U.S., with stable cash flows supported by take-or-pay contracts that account for 64% of annual cash flows [9][10] - The company anticipates cash flow growth to $5.9 billion this year, sufficient to cover its $2.6 billion dividend outlay and fund capital expenditures with excess free cash flow [11][12] - With $8.8 billion in growth capital projects, primarily in natural gas pipelines, Kinder Morgan has a strong foundation for future dividend increases, having raised its payout for eight consecutive years [13] Group 3: American States Water (AWR) - American States Water is a major water utility serving 1 million consumers across nine states, with a long history of dividend payments since 1931 and 70 consecutive years of increases, making it a top Dividend King [15] - The company has achieved a compound annual growth rate (CAGR) of 8.8% in dividend growth over the past five years and aims for over 7% in the long term, supported by planned capital expenditures [16] - The stable cash flows and growth potential position American States Water as one of the safest and most reliable dividend stocks available, with a current yield of 2.4% [17]

Core Viewpoint - Black Hills Corp. demonstrates its commitment to a sustainable energy future through its 2024 Corporate Sustainability Report, highlighting significant progress in environmental, economic, and governance areas [1][2]. Environmental Achievements - The company has achieved a 38% reduction in electric utility emissions since 2005 and aims for a 40% reduction by 2030 and a 70% reduction by 2040 [2]. - Black Hills Corp. is on track to reach net zero natural gas utility emissions by 2035 [2]. Economic Impact - The total economic impact of Black Hills Corp. in 2024 was approximately $1.5 billion, which includes $3.8 million in charitable giving and energy assistance [6]. - The company’s charitable contributions included $441,000 to United Way and $73,711 to Black Hills Cares, which, with company matching, totaled $551,000 for United Way and $346,000 in energy assistance [6]. Renewable Energy Initiatives - In 2024, Black Hills Corp. acquired a renewable natural gas facility in Iowa, expected to produce enough RNG to heat over 1,800 homes annually [6]. - The company is also innovating in coal to hydrogen technology and has conducted initial testing of carbon sequestration capabilities at its Gillette, Wyoming energy complex [6]. Customer Empowerment - Through programs like Green Forward and over $10 million in energy efficiency rebates, Black Hills Corp. has helped customers save energy equivalent to powering over 1,500 homes with electricity and 246 homes with natural gas for one year [6]. Workplace Culture - Black Hills Corp. fosters a workplace environment that encourages employee contribution, collaboration, and growth, aligning with its mission to improve life with energy [6].

Core Viewpoint - Geopolitical tensions and tariff uncertainties are prompting investors to seek safe dividend stocks, particularly in the utility sector, which is characterized by stable demand and regulated returns [1][4]. Investment Options - NextEra Energy, Black Hills, and Dominion Energy are highlighted as attractive utility stocks for investment, each with distinct characteristics and dividend profiles [2][7]. NextEra Energy - NextEra Energy is recognized for its strong dividend growth, having increased its dividend annually for over 30 years, with a 10% annualized increase over the past decade and a current yield of approximately 3.2% [9][11]. - The company’s core business is its regulated utility operation in Florida, complemented by a significant renewable power segment that contributes to its growth potential [10]. Black Hills - Black Hills operates regulated electric and natural gas assets across several states and is noted for its consistent dividend increases over more than five decades, offering a yield of 4.8% [12][13]. - The utility's customer base is growing at nearly double the rate of the U.S. population, indicating strong future growth prospects [12]. Dominion Energy - Dominion Energy presents a higher yield of 4.9%, but its dividend is currently not growing as the company focuses on restructuring and strengthening its balance sheet [14][15]. - The utility is positioned to benefit from significant industry trends, including its involvement in one of the largest data center markets and the development of a large offshore wind farm [14]. Summary of Investment Appeal - The three utilities—NextEra Energy for dividend growth, Black Hills for reliable dividends, and Dominion Energy as a turnaround story—offer diverse options for investors seeking stable income streams [16].

Core Viewpoint - Black Hills Corp. has received approval for its Lange II Project, which will enhance energy reliability in South Dakota and eastern Wyoming by addressing capacity deficits and increasing planning reserve margins [1][2]. Group 1: Project Details - The Lange II Project will consist of six reciprocating internal combustion engines (RICE) with dual-fuel capabilities (natural gas and diesel) and related interconnection facilities [2]. - The estimated cost of the Lange II Project is $280 million [2]. - Construction is set to begin in the third quarter of 2025, with the project expected to start serving customers in the second half of 2026 [3]. Group 2: Company Overview - Black Hills Corp. is a growth-oriented utility company based in Rapid City, South Dakota, serving 1.35 million natural gas and electric utility customers across eight states [4]. - The company aims to provide safe, reliable, and cost-effective electric service, enhancing the resiliency of the electric system to respond to demand fluctuations [3].

Industry Overview - The utility sector is experiencing a shift in demand, which is expected to boost growth in an industry traditionally viewed as stable and low-growth [1] - Energy demand is projected to increase significantly, with estimates rising from 22% growth between 2020 and 2040 to 55% growth by 2025, marking a substantial increase compared to the previous 20-year period [2] - Key drivers of this demand surge include artificial intelligence (AI), data centers, and electric vehicles (EVs), with demand from AI and data centers expected to rise by 300% and EV demand projected to increase by 9,000% by 2050 [3] Company Analysis: Dominion Energy - Dominion Energy has faced challenges, including a dividend cut while restructuring its asset portfolio to focus solely on electric utility operations [4] - The company is working on reducing leverage and aligning its payout ratio with industry peers, currently offering a dividend yield of 4.7%, significantly higher than the average utility yield of 2.9% [6] - Dominion holds a monopoly in a major data center market, experiencing strong demand for power, and is expected to achieve annual earnings growth of 5% to 7% due to this demand and a large offshore wind project [7] - Investors can benefit from above-average yields while awaiting dividend growth, which could lead to a higher stock premium once dividends are restored [8] Company Analysis: Black Hills - Black Hills has a strong dividend history, having increased its dividend annually for 55 consecutive years, earning the title of Dividend King [9] - Despite its small market cap of $4 billion, Black Hills offers a high dividend yield of 4.6% and is positioned to benefit from increasing demand in its service markets, projecting earnings growth of 4% to 6% annually [10] - The company represents a stable investment option in the utility sector, appealing to investors seeking consistent returns in a regulated industry [11]