NEW YORK ( TheStreet) -- BlackRock Kelso Capital Corporation (Nasdaq: BKCC) has been upgraded by TheStreet Ratings from hold to buy. The company's strengths can be seen in multiple areas, such as its revenue growth, largely solid financial position with reasonable debt levels by most measures and expanding profit margins. We feel these strengths outweigh the fact that the company shows weak operating cash flow. Highlights from the ratings report include:
- The revenue growth greatly exceeded the industry average of 43.4%. Since the same quarter one year prior, revenues rose by 34.0%. This growth in revenue does not appear to have trickled down to the company's bottom line, displayed by a decline in earnings per share.
- The current debt-to-equity ratio, 0.45, is low and is below the industry average, implying that there has been successful management of debt levels.
- The gross profit margin for BLACKROCK KELSO CAPITAL CORP is currently very high, coming in at 77.60%. Regardless of BKCC's high profit margin, it has managed to decrease from the same period last year. Despite the mixed results of the gross profit margin, BKCC's net profit margin of 38.90% significantly outperformed against the industry.
- The change in net income from the same quarter one year ago has significantly exceeded that of the Capital Markets industry average, but is less than that of the S&P 500. The net income has decreased by 20.7% when compared to the same quarter one year ago, dropping from $16.32 million to $12.94 million.
- BLACKROCK KELSO CAPITAL CORP's earnings per share declined by 28.0% in the most recent quarter compared to the same quarter a year ago. Stable earnings per share over the past year indicate the company has sound management over its earnings and share float. Despite the past stability of earnings, the consensus estimate anticipates a weakening in earnings. During the past fiscal year, BLACKROCK KELSO CAPITAL CORP increased its bottom line by earning $1.21 versus $1.20 in the prior year. For the next year, the market is expecting a contraction of 17.8% in earnings ($1.00 versus $1.21).
-- Written by a member of TheStreet RatingsStaff