BXSL - FS KKR: High Yield And Still Dirt Cheap For This BDC Leader
2024-04-09 08:30:00 ET
Summary
- FS KKR Capital is a leading business development company with a market cap of $5.4B.
- FSK is undervalued compared to its NAV and BDC peers, trading at a 22% discount to its NAV.
- Non-accruals in FSK's portfolio are a concern, but FSK management maintains confidence in high distributions.
- I explain why FSK's buying sentiments have improved since bottoming out in February.
- With FSK's valuations and high yields offering a significant level of protection against downside risks, investors shouldn't miss the buying opportunity.
FS KKR Is A Leading BDC
FS KKR Capital ( FSK ) is a leading business development company with a market cap of $5.4B. Therefore, FSK is positioned as one of the market leaders focused on the private upper-middle market segment. However, FSK is still valued at a steep discount compared to its NAV and BDC peers. Accordingly, FSK trades at a 22% discount to its NAV. FSK is also valued at a net investment income or NII per share multiple of 6.8x, well below its peers' median of 8.4x (according to S&P Cap IQ data)....
FS KKR: High Yield And Still Dirt Cheap For This BDC Leader