FS KKR Capital Corp. (NYSE:FSK) Receives Average Rating of "Reduce" from Analysts

Key Points

• Analysts are cautious on FS KKR Capital, with eight brokerages averaging a “Reduce” rating; only one analyst has a sell rating and seven have hold ratings. The consensus 1-year price target is about $10.58.
• Recent earnings missed estimates, as the company reported EPS of $0.41 versus expectations of $0.44 and revenue of $304 million versus an expected $316.81 million. Revenue also fell 24% from a year earlier.
• The company declared a high quarterly dividend of $0.42 per share, implying an annualized yield of 15.6%. The dividend will be paid on July 2 to shareholders of record on June 17.

FS KKR Capital Corp. (NYSE:FSK - Get Free Report) has received an average recommendation of "Reduce" from the eight brokerages that are covering the stock, Marketbeat reports. One equities research analyst has rated the stock with a sell recommendation and seven have issued a hold recommendation on the company. The average 1 year price objective among analysts that have covered the stock in the last year is $10.5833.

A number of research analysts have commented on the company. B. Riley Financial decreased their price target on FS KKR Capital from $17.50 to $11.00 and set a "neutral" rating on the stock in a research note on Tuesday, March 3rd. Royal Bank Of Canada restated a "sector perform" rating and set a $11.00 price target on shares of FS KKR Capital in a research note on Tuesday, May 12th. Truist Financial decreased their price target on FS KKR Capital from $17.00 to $11.00 and set a "hold" rating on the stock in a research note on Wednesday, March 4th. Weiss Ratings cut FS KKR Capital from a "hold (c-)" rating to a "sell (d+)" rating in a research note on Thursday, March 5th. Finally, Keefe, Bruyette & Woods decreased their price target on FS KKR Capital from $15.00 to $11.00 and set a "market perform" rating on the stock in a research note on Thursday, April 16th.

FS KKR Capital Trading Down 2.0%

FSK opened at $10.76 on Tuesday. FS KKR Capital has a one year low of $9.72 and a one year high of $22.68. The stock has a market capitalization of $3.01 billion, a PE ratio of -5.46 and a beta of 0.85. The business's 50 day moving average price is $10.59 and its 200 day moving average price is $13.06. The company has a debt-to-equity ratio of 1.38, a quick ratio of 2.00 and a current ratio of 2.00.

FS KKR Capital (NYSE:FSK - Get Free Report) last released its quarterly earnings data on Monday, May 11th. The company reported $0.41 EPS for the quarter, missing analysts' consensus estimates of $0.44 by ($0.03). FS KKR Capital had a negative net margin of 38.65% and a positive return on equity of 4.34%. The business had revenue of $304.00 million during the quarter, compared to analyst estimates of $316.81 million. During the same quarter in the prior year, the company posted $0.65 earnings per share. The company's revenue was down 24.0% on a year-over-year basis. As a group, equities research analysts expect that FS KKR Capital will post 1.68 EPS for the current year.

FS KKR Capital Announces Dividend

The company also recently declared a quarterly dividend, which will be paid on Thursday, July 2nd. Shareholders of record on Wednesday, June 17th will be paid a dividend of $0.42 per share. This represents a $1.68 dividend on an annualized basis and a yield of 15.6%. The ex-dividend date is Wednesday, June 17th. FS KKR Capital's dividend payout ratio is -91.37%.

Insider Buying and Selling

In other news, insider Daniel Pietrzak purchased 5,000 shares of the firm's stock in a transaction on Friday, February 27th. The shares were bought at an average cost of $11.25 per share, for a total transaction of $56,250.00. Following the completion of the purchase, the insider directly owned 64,800 shares of the company's stock, valued at approximately $729,000. This trade represents a 8.36% increase in their ownership of the stock. The purchase was disclosed in a legal filing with the Securities & Exchange Commission, which is available at this link. 0.25% of the stock is owned by company insiders.

Institutional Trading of FS KKR Capital

Several hedge funds have recently modified their holdings of the stock. Northwestern Mutual Wealth Management Co. raised its stake in shares of FS KKR Capital by 55,074.7% in the fourth quarter. Northwestern Mutual Wealth Management Co. now owns 7,741,004 shares of the company's stock valued at $114,644,000 after acquiring an additional 7,726,974 shares in the last quarter. Van ECK Associates Corp raised its stake in shares of FS KKR Capital by 2.4% in the fourth quarter. Van ECK Associates Corp now owns 4,083,940 shares of the company's stock valued at $60,484,000 after acquiring an additional 94,262 shares in the last quarter. UBS Group AG raised its stake 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 in the last quarter. Saba Capital Management L.P. acquired a new stake in shares of FS KKR Capital in the first quarter valued at $35,729,000. Finally, Oak Hill Advisors LP acquired a new stake in shares of FS KKR Capital in the fourth quarter valued at $38,659,000. 36.26% of the stock is currently owned by institutional investors and hedge funds.

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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