NYSE:FSK

Stock Analysis Report

Executive Summary

FS KKR Capital Corp. is a business development company specializing in investments in debt securities.

Rewards


Snowflake Analysis


Similar Companies

Share Price & News

How has FS KKR Capital's share price performed over time and what events caused price changes?


Latest Share Price and Events

Stable Share Price: FSK's share price has been volatile over the past 3 months.


Market Performance


7 Day Return

-11.6%

FSK

-4.5%

US Capital Markets

-4.1%

US Market


1 Year Return

-55.3%

FSK

-15.6%

US Capital Markets

-14.9%

US Market

Return vs Industry: FSK underperformed the US Capital Markets industry which returned -12.5% over the past year.

Return vs Market: FSK underperformed the US Market which returned -10.7% over the past year.


Shareholder returns

FSKIndustryMarket
7 Day-11.6%-4.5%-4.1%
30 Day-49.5%-21.1%-19.1%
90 Day-54.6%-25.9%-23.4%
1 Year-47.9%-55.3%-13.9%-15.6%-13.2%-14.9%
3 Year-57.6%-71.1%5.1%-1.0%10.7%3.5%
5 Year-51.1%-72.3%29.0%16.9%28.5%14.5%

Price Volatility Vs. Market

How volatile is FS KKR Capital's share price compared to the market and industry in the last 5 years?


Simply Wall St News

No news available

Valuation

Is FS KKR Capital undervalued compared to its fair value and its price relative to the market?

>50%

Undervalued compared to fair value


Share Price vs. Fair Value

Below Fair Value: FSK ($2.99) is trading below our estimate of fair value ($9.51)

Significantly Below Fair Value: FSK is trading below fair value by more than 20%.


Price To Earnings Ratio

PE vs Industry: FSK is good value based on its PE Ratio (6.3x) compared to the Capital Markets industry average (32.9x).

PE vs Market: FSK is good value based on its PE Ratio (6.3x) compared to the US market (13.1x).


Price to Earnings Growth Ratio

PEG Ratio: FSK is good value based on its PEG Ratio (0.3x)


Price to Book Ratio

PB vs Industry: FSK is good value based on its PB Ratio (0.4x) compared to the US Capital Markets industry average (7.9x).

Future Growth

How is FS KKR Capital forecast to perform in the next 1 to 3 years based on estimates from 7 analysts?

20.4%

Forecasted annual earnings growth


Earnings and Revenue Growth Forecasts


Analyst Future Growth Forecasts

Earnings vs Savings Rate: FSK's forecast earnings growth (18.7% per year) is above the savings rate (1.7%).

Earnings vs Market: FSK's earnings (18.7% per year) are forecast to grow faster than the US market (12.3% per year).

High Growth Earnings: FSK's earnings are forecast to grow, but not significantly.

Revenue vs Market: FSK's revenue is expected to decline over the next 3 years (-1.9% per year).

High Growth Revenue: FSK's revenue is forecast to decline over the next 3 years (-1.9% per year).


Earnings per Share Growth Forecasts


Future Return on Equity

Future ROE: FSK's Return on Equity is forecast to be low in 3 years time (9.7%).

Past Performance

How has FS KKR Capital performed over the past 5 years?

36.0%

Historical annual earnings growth


Earnings and Revenue History

Quality Earnings: FSK has a large one-off loss of $164.0M impacting its December 31 2019 financial results.

Growing Profit Margin: FSK's current net profit margins (31.6%) are lower than last year .


Past Earnings Growth Analysis

Earnings Trend: FSK's earnings have grown significantly by 36% per year over the past 5 years.

Accelerating Growth: FSK's has had negative earnings growth over the past year, so it can't be compared to its 5-year average.

Earnings vs Industry: FSK had negative earnings growth (-56.8%) over the past year, making it difficult to compare to the Capital Markets industry average (9.7%).


Return on Equity

High ROE: FSK's Return on Equity (6.4%) is considered low.

Financial Health

How is FS KKR Capital's financial position? (This company is analysed differently as a bank or financial institution)


Financial Position Analysis


Debt to Equity History and Analysis


Balance Sheet

Inventory Level: FSK has a low level of unsold assets or inventory.

Debt Coverage by Assets: FSK's debt is not covered by short term assets (assets are 0.2x debt).


Financial Institutions Analysis

Asset Level: FSK's level of assets compared to its equity is low.

Allowance for Bad Loans: Insufficient data to determine if FSK has a sufficient allowance for bad loans.

Low Risk Liabilities: FSK reports no customer deposits, loans are made up entirely of externally borrowed funds.

Loan Level: Insufficient data to determine if FSK has an acceptable proportion of non-loan assets held.

Low Risk Deposits: FSK has advanced significantly more loans than the customer deposits it holds.

Level of Bad Loans: Insufficient data to determine if FSK has an appropriate level of bad loans.

Dividend

What is FS KKR Capital's current dividend yield, its reliability and sustainability?

26.95%

Current Dividend Yield


Dividend Yield vs Market

Notable Dividend: FSK's dividend (25.42%) is higher than the bottom 25% of dividend payers in the US market (1.95%).

High Dividend: FSK's dividend (25.42%) is in the top 25% of dividend payers in the US market (5.37%)


Stability and Growth of Payments

Stable Dividend: FSK has been paying a dividend for less than 10 years and during this time payments have been volatile.

Growing Dividend: FSK has only been paying a dividend for 5 years, and since then payments have fallen.


Current Payout to Shareholders

Dividend Coverage: With its high payout ratio (160.3%), FSK's dividend payments are not well covered by earnings.


Future Payout to Shareholders

Future Dividend Coverage: FSK's dividends in 3 years are not forecast to be well covered by earnings (94% payout ratio).

Management

How experienced are the management team and are they aligned to shareholders interests?

2.3yrs

Average management tenure


CEO

Michael Forman (58yo)

2.25s

Tenure

Mr. Michael Craig Forman serves as the Chief Executive Officer and Chairman of FS KKR Capital Corp. (formerly known as fsic corporation). Mr. Forman has been leading Franklin Square Holdings, L.P. since co ...


Leadership Team

NamePositionTenureCompensationOwnership
Michael Forman
Chairman & CEO2.25yrsno data0.13% $1.8m
Brian Gerson
President & Head of Private Credit at FS Investments2.33yrsno data0.020% $282.1k
Daniel Pietrzak
Chief Investment Officer2yrsno data0.029% $409.8k
Marc Yaklofsky
Senior Vice Presidentno datano datano data
Stephen Sypherd
General Counsel & Secretary2.25yrsno data0.0034% $47.8k
James Volk
Chief Compliance Officer5yrsno data0.00019% $2.7k
Michael Kelly
President & Chief Investment Officer of FS Investments2.75yrsno datano data
Robert Paun
Director of Investor Relationsno datano datano data

2.3yrs

Average Tenure

50yo

Average Age

Experienced Management: FSK's management team is considered experienced (2.3 years average tenure).


Board Members

NamePositionTenureCompensationOwnership
Michael Forman
Chairman & CEO2.25yrsno data0.13% $1.8m
Osagie Imasogie
Independent Director0.75yrno data0.0069% $97.7k
Jeffrey Harrow
Director10.25yrsUS$156.00k0.0055% $77.7k
Michael Hagan
Lead Independent Director6.67yrsUS$166.00k0.022% $316.1k
James Kropp
Director1.33yrsno data0.0078% $111.4k
Richard Goldstein
Director1.33yrsno data0.0094% $132.9k
Todd Builione
Director0.50yrno data0.012% $170.1k
Brian Ford
Director1.33yrsno data0.0019% $26.8k
Barbara Adams
Director1.33yrsno data0.00079% $11.2k
Jerel Hopkins
Director1.33yrsno datano data

1.3yrs

Average Tenure

57.5yo

Average Age

Experienced Board: FSK's board of directors are not considered experienced ( 1.3 years average tenure), which suggests a new board.


Ownership

Who are the major shareholders and have insiders been buying or selling?


Insider Trading Volume

Insider Buying: FSK insiders have bought more shares than they have sold in the past 3 months.


Recent Insider Transactions

Ownership Breakdown

Dilution of Shares: Shareholders have been substantially diluted in the past year, with total shares outstanding growing by 106.4%.


Top Shareholders

Company Information

FS KKR Capital Corp.'s company bio, employee growth, exchange listings and data sources


Key Information

  • Name: FS KKR Capital Corp.
  • Ticker: FSK
  • Exchange: NYSE
  • Founded: 2007
  • Industry: Asset Management and Custody Banks
  • Sector: Diversified Financials
  • Market Cap: US$1.420b
  • Shares outstanding: 503.39m
  • Website: https://www.fsinvestmentcorp.com

Location

  • FS KKR Capital Corp.
  • 201 Rouse Boulevard
  • Philadelphia
  • Pennsylvania
  • 19112
  • United States

Listings

TickerExchangePrimary SecuritySecurity TypeCountryCurrencyListed on
FSKNYSE (New York Stock Exchange)YesCommon StockUSUSDApr 2014
FS5DB (Deutsche Boerse AG)YesCommon StockDEEURApr 2014

Biography

FS KKR Capital Corp. is a business development company specializing in investments in debt securities. It seeks to purchase interests in loans through secondary market transactions or directly from the target companies as primary market investments. It also seeks to invest in first lien senior secured loans, second lien secured loans and, to a lesser extent, subordinated loans, or mezzanine loans. In connection with the debt investments, the firm also receives equity interests such as warrants or options as additional consideration. It also seek to purchase minority interests in the form of common or preferred equity in our target companies, either in conjunction with one of the debt investments or through a co-investment with a financial sponsor. Additionally, on an opportunistic basis, the fund may also invest in corporate bonds and similar debt securities. The fund does not seek to invest in start-up companies, turnaround situations, or companies with speculative business plans. It seeks to invest in small and middle-market companies based in United States. The fund seeks to invest in firms with annual revenue between $10 million to $2.5 billion. It seeks to exit from securities by selling them in a privately negotiated over- the- counter market. For any investments that are not able to be sold within the secondary market, the firm seeks to exit such investments through repayment, an initial public offering of equity securities, merger, sale or recapitalization. 


Company Analysis and Financial Data Status

All financial data provided by Standard & Poor's Capital IQ.
DataLast Updated (UTC time)
Company Analysis2020/04/03 06:24
End of Day Share Price2020/04/02 00:00
Earnings2019/12/31
Annual Earnings2019/12/31


Unless specified all financial data is based on a yearly period but updated quarterly. This is known as Trailing Twelve Month (TTM) or Last Twelve Month (LTM) Data. Learn more here.