Analyzing Unitil (NYSE:UTL) & Black Hills (NYSE:BKH)

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

Earnings and Valuation

This table compares Black Hills and Unitil”s top-line revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Black Hills	$2.31 billion	2.41	$291.60 million	$3.96	18.47
Unitil	$536.00 million	1.83	$50.20 million	$3.17	16.95

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

Profitability

This table compares Black Hills and Unitil’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%
Unitil	9.49%	9.53%	2.80%

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, Unitil has a beta of 0.32, indicating that its share price is 68% less volatile than the S&P 500.

Insider & Institutional Ownership

86.7% of Black Hills shares are owned by institutional investors. Comparatively, 76.8% of Unitil shares are owned by institutional investors. 0.6% of Black Hills shares are owned by company insiders. Comparatively, 2.2% of Unitil shares are owned by company insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a stock will outperform the market over the long term.

Dividends

Black Hills pays an annual dividend of $2.81 per share and has a dividend yield of 3.8%. Unitil pays an annual dividend of $1.90 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. Unitil pays out 59.9% 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 Unitil has raised its dividend for 12 consecutive years. Black Hills is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Analyst Ratings

This is a breakdown of current ratings and target prices for Black Hills and Unitil, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Black Hills	0	0	6	0	3.00
Unitil	0	4	1	0	2.20

Black Hills currently has a consensus price target of $81.67, suggesting a potential upside of 11.66%. Unitil has a consensus price target of $56.50, suggesting a potential upside of 5.17%. Given Black Hills’ stronger consensus rating and higher possible upside, equities analysts plainly believe Black Hills is more favorable than Unitil.

Summary

Black Hills beats Unitil on 14 of the 17 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 Unitil

Unitil Corporation, a public utility holding company, engages in the distribution of electricity and natural gas. It operates through two segments, Utility Electric Operations, Utility Gas Operations. The company distributes electricity in the southeastern seacoast and state capital regions of New Hampshire, and the greater Fitchburg area of north central Massachusetts; and distributes natural gas in southeastern New Hampshire and portions of southern and central Maine, including the city of Portland and the Lewiston-Auburn area, as well as electricity and natural gas in the greater Fitchburg area of north central Massachusetts. It also operates 86 miles of interstate underground natural gas transmission pipeline that provides interstate natural gas pipeline access and transportation services primarily in Maine and New Hampshire. In addition, the company provides real estate management services. It serves approximately 108,100 electric customers and 87,500 natural gas customers. Unitil Corporation was incorporated in 1984 and is headquartered in Hampton, New Hampshire.