5/7 Close: $9.32
Market Cap: $685 million
BlackRock Kelso Capital Corp. (NASDAQ:BKCC) is a “closed-end management company.” In short, BKCC is an investment firm that takes stake in small to mid-sized companies and tries to make them run better. Thus, your performance is tied to the profitability of the companies it manages.
There are a lot of reasons to have confidence in the management of this company. It carries the storied BlackRock name and is up a nice 16% so far year-to-date, in addition to dishing out a huge dividend of 26 cents quarterly — a yield of more than 11% at its current valuation under $10 a share. So what’s not to like? Well, the overall outlook of the market could spook you. If you think a crash is likely, BKCC is going to get hurt. Also, there’s always the chance that the human managers will follow past precedent where most active investment advisers lag the broader market. However, the big yield and recent strength is reason for encouragement.