FS KKR Capital is a very well-known name on Wall Street and it offers a solid entry point at current marks. The stock closed Wednesday at 22.72 within its 52 wk trading range of 14.22 – 23.41. It current pays an 11.44% dividend.
FS KKR Capital Corp. (NASDAQ:FSK) specializes 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.
The company also invests in 1st lien senior secured loans, 2nd lien secured loans and, to a lesser extent, subordinated or mezzanine loans.
In connection with the debt investments, the BDC also receives equity interests such as warrants or options as additional consideration. It also seeks to purchase minority interests in the form of common or preferred equity in target companies, either in conjunction with one of the debt investments or through a co-investment with a financial sponsor.
Plus, on an opportunistic basis, the fund also may 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 the United S. The fund seeks to invest in firms with annual revenue between $10.0 million to $2.5 billion. It seeks to exit from securities by selling them in a privately negotiated over-the-counter market.
The company just posted stellar quarterly results, announced a huge stock buyback and raised the dividend from $0.60 per share to $0.65.
Shareholders receive an 11.44% dividend. Hovde analysts have a $23 price target on the shares, and the consensus target is $22.57. The stock closed on Tuesday at $22.71 a share.
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