Massive dividend yields are a huge draw for investors – both because everyone likes income
Two dividend cuts in the last two quarters from this BDC, and we are buying.
Here at Zacks, our focus is on the proven Zacks Rank system, which emphasizes earnings estimates and estimate revisions to find great stocks. Nevertheless, we are always paying attention to the latest value, growth, and momentum trends to underscore strong picks.
| Capital Markets Industry | Financials Sector | Michael Craig Forman CEO | XFRA Exchange | 302635206 CUSIP |
| US Country | 1,383 Employees | 17 Jun 2026 Last Dividend | 16 Jun 2020 Last Split | 16 Apr 2014 IPO Date |
FS KKR Capital Corp. operates as a business development company that specializes in the provision of customized credit solutions to private middle market U.S. companies. It aims to support these companies by primarily investing in senior secured and, to a lesser extent, subordinated debt securities. The firm takes a tailored approach to investments, often participating in both secondary market transactions and primary market opportunities directly with the target companies. With a clear focus on avoiding start-up, turnaround situations, or speculative business ventures, FS KKR Capital Corp. carefully selects its investment targets among small to middle-market firms with substantial annual revenues and EBITDA. Its investment strategy not only focuses on debt instruments but also encompasses equity interests and corporate bonds on an opportunistic basis, intending to facilitate comprehensive financial solutions to its clientele while targeting exits through strategic sales or market transactions.
These are the primary investment focus, providing secure debt to private middle market companies with the loans being backed by the companies' assets. This offers a layer of protection by prioritizing repayment in the event of a default.
FS KKR Capital Corp. invests to a lesser extent in subordinated debt, which carries a higher risk compared to senior secured loans due to its lower priority in repayment hierarchy but potentially offers higher returns. This type of investment targets companies that show strong potential for growth and stability.
These loans are a form of subordinated debt but often come with warrants or rights to convert into equity, providing a hybrid financial solution to companies for growth or transitional financing needs.
In conjunction with debt investments, the firm acquires equity interests such as warrants or options, granting it an ownership stake or the right to purchase stock. This allows the firm to participate in the equity upside of the companies it finances.
On an opportunistic basis, FS KKR Capital Corp. may invest in corporate bonds and other types of debt securities, diversifying its investment portfolio and mitigating risk through fixed-income securities offering regular interest income.
The company also makes minority investments in common or preferred equity of target companies, usually in tandem with debt investments or through co-investments with financial sponsors, aiming to capture equity appreciation.