NEW YORK ( TheStreet) -- Black Hills Corporation (NYSE: BKH) has been upgraded by TheStreet Ratings from hold to buy. The company's strengths can be seen in multiple areas, such as its good cash flow from operations, increase in stock price during the past year, increase in net income and growth in earnings per share. We feel these strengths outweigh the fact that the company has had somewhat disappointing return on equity.

Highlights from the ratings report include:
  • BKH, with its decline in revenue, slightly underperformed the industry average of 4.6%. Since the same quarter one year prior, revenues slightly dropped by 5.5%. The declining revenue has not hurt the company's bottom line, with increasing earnings per share.
  • BLACK HILLS CORP's earnings per share improvement from the most recent quarter was slightly positive. This company has reported somewhat volatile earnings recently. But, we feel it is poised for EPS growth in the coming year. During the past fiscal year, BLACK HILLS CORP reported lower earnings of $1.76 versus $2.04 in the prior year. This year, the market expects an improvement in earnings ($2.02 versus $1.76).
  • The net income growth from the same quarter one year ago has exceeded that of the Multi-Utilities industry average, but is less than that of the S&P 500. The net income increased by 2.3% when compared to the same quarter one year prior, going from $32.76 million to $33.52 million.
  • The stock has risen over the past year as investors have generally rewarded the company for its earnings growth and other positive factors like the ones we have cited in this report. The stock's price rise over the last year has driven it to a level which is somewhat expensive compared to the rest of its industry. We feel, however, that other strengths this company displays justify these higher price levels.
  • Net operating cash flow has significantly increased by 5274.35% to $21.99 million when compared to the same quarter last year. In addition, BLACK HILLS CORP has also vastly surpassed the industry average cash flow growth rate of 27.59%.

Black Hills Corporation, together with its subsidiaries, operates as a diversified energy company. It operates through two groups, Utilities and Non-regulated Energy. The company has a P/E ratio of 18.4, equal to the average utilities industry P/E ratio and above the S&P 500 P/E ratio of 17.5. Black Hills has a market cap of $1.3 billion and is part of the utilities sector and utilities industry. Shares are up 6.4% year to date as of the close of trading on Thursday.

You can view the full Black Hills Ratings Report or get investment ideas from our investment research center.

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