Contrasting Black Hills (NYSE:BKH) & WEC Energy Group (NYSE:WEC)

Black Hills (NYSE:BKH) and WEC Energy Group (NYSE:WEC) are both utilities companies, but which is the superior stock? We will contrast the two businesses based on the strength of their risk, earnings, valuation, institutional ownership, analyst recommendations, dividends and profitability.

Earnings and Valuation

This table compares Black Hills and WEC Energy Group”s gross revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Black Hills	$2.31 billion	2.44	$291.60 million	$3.96	18.69
WEC Energy Group	$9.80 billion	3.67	$1.56 billion	$5.16	21.38

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

Profitability

This table compares Black Hills and WEC Energy Group’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Black Hills	13.01%	7.98%	2.93%
WEC Energy Group	16.69%	12.90%	3.58%

Dividends

Black Hills pays an annual dividend of $2.81 per share and has a dividend yield of 3.8%. WEC Energy Group pays an annual dividend of $3.81 per share and has a dividend yield of 3.5%. Black Hills pays out 71.0% of its earnings in the form of a dividend. WEC Energy Group pays out 73.8% of its earnings in the form of a dividend. Both companies have healthy payout ratios and should be able to cover their dividend payments with earnings for the next several years. Black Hills has raised its dividend for 55 consecutive years and WEC Energy Group has raised its dividend for 23 consecutive years. Black Hills is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Analyst Recommendations

This is a summary of current ratings and recommmendations for Black Hills and WEC Energy Group, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Black Hills	0	0	6	0	3.00
WEC Energy Group	0	10	7	1	2.50

Black Hills currently has a consensus target price of $81.67, indicating a potential upside of 10.32%. WEC Energy Group has a consensus target price of $121.91, indicating a potential upside of 10.49%. Given WEC Energy Group’s higher possible upside, analysts clearly believe WEC Energy Group is more favorable than Black Hills.

Volatility & Risk

Black Hills has a beta of 0.71, indicating that its share price is 29% less volatile than the S&P 500. Comparatively, WEC Energy Group has a beta of 0.47, indicating that its share price is 53% less volatile than the S&P 500.

Institutional and Insider Ownership

86.7% of Black Hills shares are held by institutional investors. Comparatively, 77.2% of WEC Energy Group shares are held by institutional investors. 0.6% of Black Hills shares are held by company insiders. Comparatively, 0.5% of WEC Energy Group shares are held by company insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a company is poised for long-term growth.

Summary

WEC Energy Group beats Black Hills on 11 of the 18 factors compared between the two stocks.

About Black Hills

Black Hills Corporation, through its subsidiaries, operates as an electric and natural gas utility company in the United States. The company operates in two segments: Electric Utilities and Gas Utilities. The Electric Utilities segment generates, transmits, and distributes electricity to approximately 222,000 electric utility customers in Colorado, Montana, South Dakota, and Wyoming; and owns and operates 1,394 megawatts of generation capacity and 9,106 miles of electric transmission and distribution lines. The Gas Utilities segment distributes natural gas to approximately 1,116,000 natural gas utility customers in Arkansas, Colorado, Iowa, Kansas, Nebraska, and Wyoming; owns and operates 4,663 miles of intrastate gas transmission pipelines; 42,514 miles of gas distribution mains and service lines; seven natural gas storage sites; and approximately 50,000 horsepower of compression and 516 miles of gathering lines. It also constructs and maintains customer owned gas infrastructure facilities for gas transportation customers; and provides appliance repair services to residential utility customers, as well as electrical system construction services to large industrial customers. In addition, the company produces electric power through wind, natural gas, and coal-fired generating plants; and coal at its coal mine located near Gillette, Wyoming. Black Hills Corporation was incorporated in 1941 and is headquartered in Rapid City, South Dakota.

About WEC Energy Group

WEC Energy Group, Inc., through its subsidiaries, provides regulated natural gas and electricity, and renewable and nonregulated renewable energy services in the United States. It operates through Wisconsin, Illinois, Other States, Electric Transmission, and Non-Utility Energy Infrastructure segments. The company generates and distributes electricity from coal, natural gas, oil, and nuclear, as well as renewable energy resources, including wind, solar, hydroelectric, and biomass; and distributes and transports natural gas. It also owns, maintains, monitors, and operates electric transmission systems; and generates, distributes, and sells steam. As of December 31, 2023, the company operated approximately 35,500 miles of overhead distribution lines and 36,500 miles of underground distribution cables, as well as 430 electric distribution substations and 523,700 line transformers; approximately 46,400 miles of natural gas distribution mains; 1,700 miles of natural gas transmission mains; 2.4 million natural gas lateral services; 490 natural gas distribution and transmission gate stations; and 69.3 billion cubic feet of working gas capacities in underground natural gas storage fields. The company was formerly known as Wisconsin Energy Corporation and changed its name to WEC Energy Group, Inc. in June 2015. WEC Energy Group, Inc. was founded in 1896 and is headquartered in Milwaukee, Wisconsin.