Will the stock market crash? I don’t know. That’s why I own this high yielding stock.

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 all-time highs, which is why I’m happy to own some boring necessity stocks. One of my favorites is utility The Black Hills (BKH 1.00%). Here’s why they own this high-yielding stock and why you might want to buy it too.

What does the Black Hills do?

With a market cap of only about $4 billion, Black Hills isn’t a particularly large utility. In fact, it is surpassed by the industry giant NextEra Energy (NO 1.44%)which has a market capitalization of $160 billion. Compared to that, the Black Hills is just a rounding error! However, it still provides a necessity of modern life.

Image source: Getty Images.

The company has approximately 1.3 million natural gas and electric customers in parts of Arkansas, Colorado, Iowa, Kansas, Montana, Nebraska, South Dakota and Wyoming. Without the power provided by the Black Hills, these customers would be operating in the Dark Ages.

The business is regulated, so it has to get its rates and capital expenditure plans approved by the government. However, being regulated also means that it has a monopoly in the regions it serves. Those 1.3 million customers have nowhere to turn for their energy needs.

Black Hills is a bit of a turtle given the business, but with the market near all-time highs, I’m glad to have some reliable turtles in the portfolio. Because of its small size, however, many investors have never heard of the Black Hills. That’s bad because it easily outperformed industry giants on one key metric: dividends.

Black Hills is a dividend king

NextEra Energy, which most investors have heard of, has raised 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 amassed. It’s one of the longest dividend streaks in the utility sector, making it an elite high dividend king.

Think back to the last five decades: the list of bad times includes the pandemic, the Great Recession, the dot.com bust/recession, Black Monday and the raging inflation and oil crisis of the 1970s.

And that’s just the main reel. There were smaller ups and downs on Wall Street and also in the economy. However, Black Hills has continued to reward investors with annual dividend increases. This is the type of consistency I want to have in my income portfolio when the market is floating at high levels.

Market value of BKH; data by YCharts.

But there is more to the story than just the dividend. For example, Black Hills’ customer base is growing nearly three times faster than the broader US population. That should support solid growth as the utility invests to serve that expanding customer base.

To put some numbers on that, the five-year capital investment plan is $4.3 billion, which management expects to translate into earnings growth between 4% and 6% per year.

The dividend is likely to track with earnings growth, meaning dividend growth of around 5% is the target. That’s a solid number for a utility, and it happens to be the annualized dividend growth rate that Black Hills has achieved over the past decade. So, basically, it’s expected to keep doing what it’s been doing for years: providing customers with reliable energy and investors with reliable dividend growth.

Black Hills is a boring and reliable dividend stock

I will not brag to anyone that I own the Black Hills; it’s not that kind of stock. It’s a fundamental investment that I can comfortably own through good times and bad, knowing that its essential service will always be in demand. Along the way, they can collect a high dividend yield of 4.5%, one of the highest in the utilities sector, supported by a growing dividend (for reference, NextEra’s yield is just 2.6%).

If Wall Street hits the ceiling and a bear market occurs, I won’t lose any sleep over owning the Black Hills. If you’re a conservative dividend investor, it probably sounds attractive to you, too.