Rising markets have always been followed by falling markets. It is the typical bull/bear cycle that investors have to deal with.

Right now, the market is near historic highs, so I’m happy to own some boring, necessary stocks. One of my favorites is utilities. Black Hills (NYSE: BKH)Here’s why I own this high-yield stock and why you might want to buy it, too.

What does Black Hills do?

With a market capitalization of only about $4 billion, Black Hills is not a particularly large utility company. In fact, it is dwarfed by the industry giant. NextEra Energy (NYSE: NEE)which has a market cap of $160 billion. Black Hills is just a rounding error in comparison! Yet it offers a necessity of modern life.

The company has about 1.3 million natural gas and electric customers in parts of Arkansas, Colorado, Iowa, Kansas, Montana, Nebraska, South Dakota and Wyoming. Without the energy that Black Hills provides, those customers would be living in the Middle Ages.

The company is subject to regulation and must have its tariffs and investment plans approved by the government. However, regulation also means that it has a monopoly in the regions it serves. These 1.3 million customers cannot meet their energy needs anywhere else.

Black Hills is a bit of a turtle considering the business, but with the market near all-time highs, I’m happy to have a few reliable turtles in my portfolio. However, due to the company’s small size, many investors have never heard of Black Hills. That’s a shame, because it has handily outperformed the industry giants on one key metric: dividends.

Black Hills is a dividend king

NextEra Energy, which most investors have heard of, has increased its dividend annually for 30 years. That’s a very impressive streak, but it pales in comparison to the 54 consecutive years of annual dividend increases that Black Hills has accumulated. It’s one of the longest dividend streaks in the utility sector, making the company a highly elite Dividend King.

Think about the last five decades: The list of bad times includes the pandemic, the Great Recession, the dot-com bubble/recession bust, Black Monday, and the rampant inflation and oil crisis of the 1970s.

And those are just the highlights. There have been smaller ups and downs on Wall Street and in the economy, too. Despite all of that, Black Hills has continued to reward investors with annual dividend increases. That’s the kind of consistency I want in my income portfolio when the market is volatile at high levels.

But there’s more to it than just the dividend. For example, Black Hills’ customer base is growing nearly three times faster than the entire U.S. population. That should support solid growth as the utility invests to serve that growing customer base.

The story continues

To put this in numbers: The five-year investment plan is $4.3 billion, which management expects to result in profit growth of between 4 and 6 percent per year.

The dividend will likely grow in line with earnings growth, meaning it is targeting dividend growth of around 5%. That’s a solid number for a utility company, and it also happens to be the annual dividend growth rate that Black Hills has achieved over the past decade. So basically, the company expects to keep doing what it’s been doing for years: providing customers with reliable power and investors with reliable dividend growth.

Black Hills is a boring and reliable dividend stock

I’m not going to brag to anyone that I own Black Hills; it’s not that kind of stock. It’s a fundamental investment that I can comfortably hold through good times and bad, knowing that its important service will always be in demand. All the while, I can earn a hefty 4.5% dividend yield, one of the highest in the utilities sector, backed by a growing dividend (for comparison, NextEra’s yield is only about 2.6%).

If Wall Street goes belly up and a bear market ensues, owning Black Hills won’t give me any sleepless nights. If you’re a conservative dividend investor, this will probably sound attractive to you, too.

Should you invest $1,000 in Black Hills now?

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Reuben Gregg Brewer holds positions in Black Hills, Dominion Energy, and Southern Company. The Motley Fool holds positions in and recommends NextEra Energy. The Motley Fool recommends Dominion Energy and Duke Energy. The Motley Fool has a disclosure policy.

Will the stock market crash? I don’t know. That’s why I own this high-yield stock. was originally published by The Motley Fool