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.

FS KKR Capital Corp. (NYSE:FSK - Get Free Report)'s stock price gapped down prior to trading on Thursday after the company announced weaker than expected quarterly earnings. 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 traded.

The company reported ($0.60) earnings per share for the quarter, missing the consensus estimate of $0.63 by ($1.23). FS KKR Capital had a return on equity of 6.24% and a net margin of 13.24%. The business had revenue of $398.00 million for the quarter, compared to analysts' expectations of $402.00 million. During the same quarter last year, the firm earned $0.75 earnings per share.

FS KKR Capital Increases Dividend

The business also recently disclosed 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 represents a $2.80 dividend on an annualized basis and a dividend yield of 16.0%. The ex-dividend date is Wednesday, September 17th. This is an increase from FS KKR Capital's previous quarterly dividend of $0.64. FS KKR Capital's dividend payout ratio (DPR) is 328.21%.

Wall Street Analysts Forecast Growth

A number of equities analysts have issued reports on the company. Oppenheimer lowered their price target 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. Wells Fargo & Company reduced their price objective on FS KKR Capital from $18.00 to $15.00 and set an "underweight" rating on the stock in a research report on Friday. 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 research note on Thursday, May 15th. JPMorgan Chase & Co. reduced their price objective on FS KKR Capital from $22.00 to $19.00 and set a "neutral" rating on the stock in a research note on Thursday, April 24th. Finally, B. Riley assumed coverage on FS KKR Capital in a research report on Tuesday, May 13th. They set a "neutral" rating and a $19.00 target price on the stock. Two investment analysts have rated the stock with a sell rating and five have assigned a hold rating to the company's stock. According to data from MarketBeat.com, the company has an average rating of "Hold" and a consensus price target of $19.00.

Institutional Investors Weigh In On FS KKR Capital

Institutional investors and hedge funds have recently modified their holdings of the business. Sunbelt Securities Inc. increased its holdings in shares of FS KKR Capital by 1.3% during the 4th quarter. Sunbelt Securities Inc. now owns 33,447 shares of the company's stock worth $726,000 after purchasing an additional 423 shares during the period. Trust Co. of Vermont grew its stake in shares of FS KKR Capital by 51.0% during the second quarter. Trust Co. of Vermont now owns 1,525 shares of the company's stock valued at $32,000 after purchasing an additional 515 shares during the last quarter. Kathmere Capital Management LLC boosted its stake in FS KKR Capital by 1.4% in the first quarter. Kathmere Capital Management LLC now owns 41,258 shares of the company's stock valued at $864,000 after acquiring an additional 562 shares during the last quarter. CFO4Life Group LLC boosted its position in shares of FS KKR Capital by 3.0% during the second quarter. CFO4Life Group LLC now owns 20,081 shares of the company's stock worth $417,000 after purchasing an additional 578 shares in the last quarter. Finally, West Michigan Advisors LLC raised its holdings in shares of FS KKR Capital by 1.5% during the second quarter. West Michigan Advisors LLC now owns 41,194 shares of the company's stock worth $884,000 after acquiring an additional 591 shares during the period. Institutional investors and hedge funds own 36.26% of the company's stock.

FS KKR Capital Trading Down 2.3%

The company has a current ratio of 2.40, a quick ratio of 2.40 and a debt-to-equity ratio of 1.31. The business's fifty day moving average is $21.13 and its 200 day moving average is $21.24.

FS KKR Capital Company Profile

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.