Beach Point Capital Management LP Lowers Holdings in FS KKR Capital Corp. $FSK

Key Points

• Beach Point Capital Management reduced its FS KKR Capital holdings by 61% in the second quarter, selling 1.91 million shares and retaining 1.22 million shares worth approximately $12.8 million.
• Analysts remain cautious: seven rate FSK as “Hold” and one as “Sell,” producing an average “Reduce” rating and an average price target of $11.43.
• FS KKR Capital reported quarterly EPS of $0.43, slightly exceeding estimates, and raised its quarterly dividend to $0.44 per share, equivalent to a 14.3% annualized yield.

Beach Point Capital Management LP cut its holdings in FS KKR Capital Corp. (NYSE:FSK - Free Report) by 61.0% in the 2nd quarter, according to the company in its most recent filing with the Securities and Exchange Commission. The firm owned 1,221,115 shares of the company's stock after selling 1,908,672 shares during the period. FS KKR Capital accounts for 0.0% of Beach Point Capital Management LP's investment portfolio, making the stock its 5th biggest position. Beach Point Capital Management LP owned approximately 0.44% of FS KKR Capital worth $12,821,708 as of its most recent SEC filing.

A number of other hedge funds have also bought and sold shares of the business. Northwestern Mutual Wealth Management Co. grew its holdings in FS KKR Capital by 55,074.7% during the 4th quarter. Northwestern Mutual Wealth Management Co. now owns 7,741,004 shares of the company's stock valued at $114,644,000 after buying an additional 7,726,974 shares in the last quarter. Van ECK Associates Corp boosted its position in shares of FS KKR Capital by 13.4% in the second quarter. Van ECK Associates Corp now owns 5,382,748 shares of the company's stock valued at $56,519,000 after acquiring an additional 636,889 shares during the period. UBS Group AG boosted its position in shares of FS KKR Capital by 15.3% in the fourth quarter. UBS Group AG now owns 3,806,076 shares of the company's stock valued at $56,368,000 after acquiring an additional 505,982 shares during the period. Saba Capital Management L.P. purchased a new position in FS KKR Capital during the first quarter valued at approximately $35,729,000. Finally, Legal & General Group Plc purchased a new position in FS KKR Capital during the second quarter valued at approximately $28,742,000. 36.26% of the stock is currently owned by hedge funds and other institutional investors.

Wall Street Analyst Weigh In

Several analysts have issued reports on the stock. Capital One Financial set a $12.00 target price on shares of FS KKR Capital in a research note on Friday, August 7th. Weiss Ratings reaffirmed a "sell (d+)" rating on shares of FS KKR Capital in a report on Tuesday, June 2nd. JPMorgan Chase & Co. increased their price objective on FS KKR Capital from $9.50 to $11.00 and gave the stock a "neutral" rating in a research report on Wednesday, August 19th. Truist Financial lifted their price objective on FS KKR Capital from $11.00 to $12.00 and gave the company a "hold" rating in a research note on Friday, August 7th. Finally, Royal Bank Of Canada restated a "sector perform" rating and set a $13.00 target price (up from $11.00) on shares of FS KKR Capital in a research report on Wednesday, August 12th. Seven investment analysts have rated the stock with a Hold rating and one has assigned a Sell rating to the stock. Based on data from MarketBeat, the stock presently has an average rating of "Reduce" and an average price target of $11.43.

FS KKR Capital Trading Up 0.4%

NYSE FSK opened at $12.28 on Friday. The firm has a market cap of $3.39 billion, a PE ratio of -9.10 and a beta of 0.83. FS KKR Capital Corp. has a 1-year low of $9.72 and a 1-year high of $18.25. The stock has a 50-day moving average of $11.17 and a 200-day moving average of $11.08. The company has a current ratio of 2.28, a quick ratio of 2.28 and a debt-to-equity ratio of 1.26.

FS KKR Capital (NYSE:FSK - Get Free Report) last posted its quarterly earnings results on Thursday, August 6th. The company reported $0.43 earnings per share (EPS) for the quarter, topping the consensus estimate of $0.42 by $0.01. FS KKR Capital had a positive return on equity of 9.70% and a negative net margin of 28.52%.The business had revenue of $290.00 million for the quarter, compared to analyst estimates of $286.75 million. During the same period last year, the company earned ($0.75) EPS. As a group, sell-side analysts forecast that FS KKR Capital Corp. will post 1.64 EPS for the current year.

FS KKR Capital Increases Dividend

The company also recently declared a quarterly dividend, which will be paid on Friday, October 2nd. Investors of record on Wednesday, September 16th will be issued a dividend of $0.44 per share. The ex-dividend date is Wednesday, September 16th. This represents a $1.76 dividend on an annualized basis and a yield of 14.3%. This is an increase from FS KKR Capital's previous quarterly dividend of $0.42. FS KKR Capital's dividend payout ratio (DPR) is currently -124.44%.

About FS KKR Capital

FS KKR Capital Corp NYSE: FSK is a closed-end, externally managed business development company that primarily invests in private middle-market U.S. companies. The firm seeks to generate current income and capital appreciation by structuring investments in floating-rate senior secured loans, unitranche financings, second lien debt and mezzanine instruments. As a business development company, FSK provides financing solutions designed to support growth initiatives, acquisitions, leveraged buyouts and recapitalizations for privately held enterprises.

Established in 2018 through a strategic partnership between FS Investment Corporation and KKR Credit Advisors, a division of global investment firm KKR & Co Inc, FSK combines the credit underwriting capabilities of KKR’s global platform with FS’s expertise in private credit markets.

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