In the months since I wrote my cautious piece on Black Hills Corp. (NYSE:BKH), the shares are down about 9.5% against a gain of 35% for the S&P 500. I thought I’d check in on the name again because I’m on the hunt for value at the moment, and after all, a stock that’s trading at $59 is, by definition, less risky than when it was trading at $66. I’ll try to determine whether the shares are a good buy at the moment by looking at the updated financial history and by looking at the stock as a thing distinct from the underlying business. Since I recommended a short put trade that worked out very well, you’ve gotta just know that I’ll be writing about that, too.
I’ll leap right to the conclusion, dear reader, in case you’ve decided you’ve got better things to do than listen to me blather on about this company. The shares are trading near historically low multiples, and I think the dividend is very well covered. For that reason, I’ll be starting a small position in the company. I won’t buy all upfront as I fear a market correction over the coming months, but I certainly think this is a buy at current price. I’ll go through my reasoning below.
Financial Update
For a discussion of the sustainability of the company’s dividend, please see my earlier article on the name. In case you forgot for some reason, dear readers, I noted that over the longer term, the dividend is dependent upon the company’s ability to raise capital going forward. This is especially the case in 2023 as I think this is even more true now than it was then, as the company has issued even more debt. We should also note that since my article came out, the firm issued another $400 million of 10
