The Best Stock in South Dakota: Black Hills Corp.

We scoured the nation to identify the best stock in every state. Black Hills Corp. (symbol BKH) is the publicly traded company we picked in South Dakota. The company headquarters is located in Rapid City.

A word of caution: Since we selected a single stock from each state (plus one from D.C), and choices in some states are sparse, a few of our picks are best suited to investors comfortable with a higher degree of risk. This is not necessarily one of our 51 favorite stocks in the entire U.S., in other words.

Black Hills by the Numbers

• Headquarters: Rapid City
• Share price: $70.52
• Market value: $3.8 billion
• Price-earnings ratio: 20

(Prices and data are as of June 22, 2017)

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Black Hills is the parent company of Black Hills Energy, a gas and electric utility in the Midwest and western U.S. The company also mines coal, and it has a gas and oil exploration and production business.

Last year’s earnings dipped, largely due to the acquisition of SourceGas in February 2016, which cost Black Hills 56 cents per share in merger expenses. Those costs put a damper on what is typically the company’s strongest earnings season, says Value Line analyst Paul Debbas. But with the integration largely complete, earnings are poised to grow this year by 12% and then by 10% in 2018, say analysts at Credit Suisse. They say the company is working to significantly cut costs and reduce debt through 2019, at which point they expect Black Hills to pursue growth opportunities through reinvestment in the business and possible mergers and acquisitions. Credit Suisse assigns the stock an “outperform” rating with a 12-month price target of $73.