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

Key Points

• Analysts hold a bearish view of FS KKR Capital: Eight brokerages assign the stock a consensus “Reduce” rating, including two sells and six holds. The average 12-month price target is $10.58, near its reported $10.56 share price.
• Recent financial results weakened: Quarterly EPS came in at $0.41 versus the $0.44 consensus estimate, while revenue fell 24% year over year to $304 million and missed expectations.
• The stock offers a high dividend yield but carries significant risk: FS KKR Capital pays an annualized $1.68 dividend, yielding about 15.9%, while its shares remain near the lower end of their 52-week range and the company reported a negative net margin.

FS KKR Capital Corp. (NYSE:FSK - Get Free Report) has been given an average recommendation of "Reduce" by the eight ratings firms that are currently covering the firm, MarketBeat.com reports. Two research analysts have rated the stock with a sell rating and six have given a hold rating to the company. The average twelve-month price objective among analysts that have issued ratings on the stock in the last year is $10.5833.

A number of brokerages have issued reports on FSK. Wall Street Zen raised shares of FS KKR Capital from a "sell" rating to a "hold" rating in a report on Saturday. Wells Fargo & Company lowered their target price on FS KKR Capital from $11.00 to $10.00 and set an "equal weight" rating for the company in a report on Tuesday, May 12th. Weiss Ratings reiterated a "sell (d+)" rating on shares of FS KKR Capital in a research report on Tuesday, June 2nd. Keefe, Bruyette & Woods cut their price target on FS KKR Capital from $15.00 to $11.00 and set a "market perform" rating on the stock in a report on Thursday, April 16th. Finally, Zacks Research lowered FS KKR Capital from a "hold" rating to a "strong sell" rating in a research report on Monday, July 13th.

FS KKR Capital Stock Up 0.0%

Shares of NYSE:FSK opened at $10.56 on Friday. The company's fifty day moving average is $10.68 and its two-hundred day moving average is $11.37. 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 has a 1-year low of $9.72 and a 1-year high of $21.34. The stock has a market capitalization of $2.96 billion, a price-to-earnings ratio of -5.36 and a beta of 0.82.

FS KKR Capital (NYSE:FSK - Get Free Report) last posted its quarterly earnings results on Monday, May 11th. The company reported $0.41 EPS for the quarter, missing the consensus estimate 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 period last year, the firm posted $0.65 earnings per share. The company's quarterly revenue was down 24.0% on a year-over-year basis. Equities analysts anticipate that FS KKR Capital will post 1.64 EPS for the current year.

FS KKR Capital Announces Dividend

The business also recently announced a quarterly dividend, which was paid on Thursday, July 2nd. Shareholders of record on Wednesday, June 17th were paid a $0.42 dividend. This represents a $1.68 dividend on an annualized basis and a yield of 15.9%. The ex-dividend date was Wednesday, June 17th. FS KKR Capital's dividend payout ratio (DPR) is presently -85.28%.

Hedge Funds Weigh In On FS KKR Capital

Institutional investors have recently modified their holdings of the company. Family Wealth Partners LLC increased its holdings in shares of FS KKR Capital by 17.6% in the 2nd quarter. Family Wealth Partners LLC now owns 123,890 shares of the company's stock worth $1,301,000 after acquiring an additional 18,519 shares during the period. Valeo Financial Advisors LLC boosted its stake in FS KKR Capital by 28.4% during the 2nd quarter. Valeo Financial Advisors LLC now owns 14,580 shares of the company's stock valued at $153,000 after purchasing an additional 3,223 shares during the period. NewEdge Advisors LLC grew its position in FS KKR Capital by 1.7% in the 1st quarter. NewEdge Advisors LLC now owns 139,978 shares of the company's stock worth $1,425,000 after purchasing an additional 2,347 shares during the last quarter. Bank of America Corp DE grew its position in FS KKR Capital by 221.0% in the 1st quarter. Bank of America Corp DE now owns 416,171 shares of the company's stock worth $4,237,000 after purchasing an additional 286,541 shares during the last quarter. Finally, Rivernorth Capital Management LLC increased its stake in shares of FS KKR Capital by 580.7% in the first quarter. Rivernorth Capital Management LLC now owns 2,097,170 shares of the company's stock valued at $21,349,000 after purchasing an additional 1,789,090 shares during the period. Institutional investors own 36.26% of the company's stock.

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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