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GuruFocus has detected 9 Warning Signs with Black Hills Corp $BKH.
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Black Hills Corp (NYSE:BKH)
Retained Earnings
$514 Mil (As of Mar. 2017)

Retained earnings is the accumulated portion of net income that is not distributed to shareholders. Black Hills Corp's retained earnings for the quarter that ended in Mar. 2017 was $514 Mil.

Black Hills Corp's quarterly retained earnings declined from Sep. 2016 ($462 Mil) to Dec. 2016 ($458 Mil) but then increased from Dec. 2016 ($458 Mil) to Mar. 2017 ($514 Mil).

Black Hills Corp's annual retained earnings declined from Dec. 2014 ($577 Mil) to Dec. 2015 ($473 Mil) and declined from Dec. 2015 ($473 Mil) to Dec. 2016 ($458 Mil).


Definition

Retained Earnings is the accumulated portion of net income that is not distributed to shareholders. Because the net income was not distributed to shareholders, shareholders’ equity is increased by the same amount.

Of course, if a company loses, it is called retained losses, or accumulated losses.


Explanation

Historically profitable companies sometimes have negative retained earnings. This is because they have cumulatively paid out more to shareholders than they reported in profits.

For example, in 2011, Microsoft had negative retained earnings. This does not mean the company lost more money than it made over the years. It just means it paid out more money than it earned.

If a company has negative retained earnings, investors should check the 10-year financial results. They should not assume that negative retained earnings prove a company has generally lost money in the past.

Of course, many companies with negative retained earnings have indeed lost money in the past.

Retained Earnings: Warren Buffett’s Secret.

One of the most important indicators of durable competitive advantage. Net earnings can be paid out as dividends, used to buy back shares or retained for growth.

If the company loses more than it has accumulated, retained earnings is negative.

If a company isn’t adding to its retained earnings, it isn’t growing its net worth.

Rate of growth of retained earnings is good indicator whether it’s benefiting from a competitive advantage.

Microsoft is negative because it chose to buyback stock and pay dividends.

The more earnings retained, the faster it grows and increases growth rate for future earnings.


Historical Data

* All numbers are in millions except for per share data and ratio. All numbers are in their local exchange's currency.

Black Hills Corp Annual Data

Dec07Dec08Dec09Dec10Dec11Dec12Dec13Dec14Dec15Dec16
Retained Earnings 397447474486477493516577473458

Black Hills Corp Quarterly Data

Dec14Mar15Jun15Sep15Dec15Mar16Jun16Sep16Dec16Mar17
Retained Earnings 577593533505473491470462458514
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