FS KKR Capital (NYSE:FSK) Shares Gap Down Following Weak Earnings

Key Points

• Shares of FS KKR Capital gapped down from $20.24 to $18.90 following weaker than expected earnings, reporting $0.60 EPS compared to the $0.63 consensus estimate.
• The company announced a quarterly dividend increase from $0.64 to $0.70 per share, reflecting a 14.9% dividend yield, despite a payout ratio of 134.74%.
• Several analysts have revised their price targets for FS KKR Capital, with Wells Fargo lowering it to $18.00 and the consensus price target now at $19.50.

Shares of FS KKR Capital Corp. (NYSE:FSK - Get Free Report) gapped down prior to trading on Thursday following a weaker than expected earnings announcement. The stock had previously closed at $20.24, but opened at $18.90. FS KKR Capital shares last traded at $18.85, with a volume of 1,354,176 shares.

The company reported $0.60 earnings per share for the quarter, missing analysts' consensus estimates of $0.63 by ($0.03). FS KKR Capital had a return on equity of 11.78% and a net margin of 31.53%. The business had revenue of $398.00 million during the quarter, compared to analysts' expectations of $402.00 million. During the same period last year, the firm posted $0.75 EPS.

FS KKR Capital Increases Dividend

The company also recently declared a quarterly dividend, which will be paid on Thursday, October 2nd. Shareholders of record on Wednesday, September 17th will be paid a dividend of $0.70 per share. This is an increase from FS KKR Capital's previous quarterly dividend of $0.64. This represents a $2.80 dividend on an annualized basis and a dividend yield of 14.9%. FS KKR Capital's payout ratio is currently 134.74%.

Analysts Set New Price Targets

FSK has been the subject of a number of recent research reports. Wells Fargo & Company cut their price objective on FS KKR Capital from $19.00 to $18.00 and set an "underweight" rating for the company in a research note on Monday, April 28th. JPMorgan Chase & Co. decreased their price objective on FS KKR Capital from $22.00 to $19.00 and set a "neutral" rating on the stock in a report on Thursday, April 24th. Royal Bank Of Canada decreased their price target on FS KKR Capital from $22.00 to $21.00 and set a "sector perform" rating on the stock in a report on Thursday, May 15th. B. Riley assumed coverage on FS KKR Capital in a report on Tuesday, May 13th. They set a "neutral" rating and a $19.00 price target on the stock. Finally, Oppenheimer cut their price objective on FS KKR Capital from $22.00 to $21.00 and set a "market perform" rating on the stock in a research report on Friday, May 9th. One research analyst has rated the stock with a sell rating and five have given a hold rating to the company's stock. According to data from MarketBeat, the stock presently has an average rating of "Hold" and a consensus price target of $19.50.

Institutional Trading of FS KKR Capital

Several institutional investors have recently bought and sold shares of FSK. Franklin Resources Inc. grew its holdings in FS KKR Capital by 13.1% in the fourth quarter. Franklin Resources Inc. now owns 407,510 shares of the company's stock valued at $8,851,000 after purchasing an additional 47,254 shares during the period. Peapack Gladstone Financial Corp acquired a new stake in FS KKR Capital in the fourth quarter valued at approximately $316,000. Raymond James Financial Inc. acquired a new stake in FS KKR Capital in the fourth quarter valued at approximately $6,499,000. Bessemer Group Inc. acquired a new stake in FS KKR Capital in the fourth quarter valued at approximately $4,871,000. Finally, Jaffetilchin Investment Partners LLC grew its holdings in FS KKR Capital by 123.8% in the fourth quarter. Jaffetilchin Investment Partners LLC now owns 17,377 shares of the company's stock valued at $377,000 after purchasing an additional 9,614 shares during the period. 36.26% of the stock is owned by institutional investors and hedge funds.

FS KKR Capital Stock Performance

The company has a debt-to-equity ratio of 1.22, a current ratio of 2.09 and a quick ratio of 2.09. The firm has a fifty day simple moving average of $21.25 and a 200 day simple moving average of $21.32. The company has a market capitalization of $5.26 billion, a price-to-earnings ratio of 9.90 and a beta of 0.93.

About FS KKR Capital

FS KKR Capital Corp. is a business development company specializing in investments in debt securities. It provides customized credit solutions to private middle market U.S. companies. It invest primarily in the senior secured debt and, to a lesser extent, the subordinated debt of private middle market U.S.

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