FSK - Better Buy: Ares Capital or FS KKR Capital?
2023-11-14 05:15:00 ET
When it comes to income-paying stocks, business development corporations (BDCs) tend to have some of the highest dividend yields available to investors. These companies lend to segments of the market that banks tend to avoid and can be a solid source of passive income for investors.
Ares Capital (NASDAQ: ARCC) is one of the largest BDCs in the U.S., paying out a dividend yielding 9.8%. However, it's only one of several BDCs for investors to buy. FS KKR Capital (NYSE: FSK) is another BDC with an even higher dividend yield of 14.1%. Here's what you should know about the two companies and which is a better buy today.
Ares Capital and FS KKR Capital are specialty finance companies that provide funding through debt and equity investments in middle-market companies in the U.S. These companies have earnings before interest, taxes, depreciation, and amortization ( EBITDA ) between $10 million and $250 million, and tend to be overlooked by banks because of the higher perceived risk.
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Better Buy: Ares Capital or FS KKR Capital?