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Is FS KKR Capital's 12.2% Yield At Risk?

Published Wed, 30 Jan 2019 17:10:37 -0500 on Seeking Alpha

Business Development Companies ("BDCs") will begin reporting results next week and this article discusses some of the items that investors should be watching.

Source: SEC Filings and www.bdcbuzz.com
As mentioned in previous articles, FSIC was my smallest position due to selling shares in anticipation of the dividend reduction announced in August 2017. I sold my remaining shares after the company reported Q2 2018 results due to expected additional credit issues including some of the ones discussed in this article.

Source: Yahoo Finance
As mentioned in previous articles, BDCs are priced based on expected returns to shareholders including regular and special dividends as well as realized capital gains and growing book values. BDCs with higher yields usually implies higher risk and/or expected credit issues driving dividend cuts and lower book values.
I am expecting a handful of BDCs to announce dividend reductions in 2019.

Source: SEC Filings and www.bdcbuzz.com
On December 19, 2018, a partnership between FS Investments and KKR Credit Advisors announced the closing of the merger between FS Investment Corp (FSIC) and Corporate Capital Trust, Inc. (CCT), creating the second-largest publicly traded BDC. With the closing of the merger, FS Investment Corporation has been renamed FS KKR Capital Corp. (FSK) and began trading on the New York Stock Exchange under the ticker symbol "FSK" on December 20, 2018.
FS/KKR... Read more

Stock name Last trade   P/E Earnings/Share Dividend/Share Dividend yield
GARRISON CAPITAL 7.28   0.0 -0.10 0.92 12.14
APOLLO INVESTMENT 15.13   17.8 0.85 1.80 11.80
MONROE CAPITAL 12.13   41.8 0.29 1.40 11.48
KOHLBERG CAPITAL 3.58   0.0 -0.25 0.40 11.27
PROSPECT CAPITAL 6.61   13.2 0.50 0.72 10.89
FIDUS INVESTMENT 15.14   7.5 2.02 1.56 10.20
OAKTREE SPECIALTY LENDING 4.90   0.0 -1.39 0.50 10.02
HERCULES TECH GROWTH CAP 12.46   14.7 0.85 1.24 9.96
ARES CAPITAL 17.00   8.4 2.02 1.60 9.36
ALCENTRA CAPITAL 7.52   18.8 0.40 0.72 9.35
GLADSTONE CAPITAL 9.04   28.2 0.32 0.84 9.27
SOLAR SENIOR CAPITAL 17.09   20.1 0.85 1.41 8.31
OAKTREE STRATEGIC INCOME 8.26   45.9 0.18 0.62 7.53
GOLUB CAPITAL BDC 17.83   13.5 1.32 1.28 7.19
GLADSTONE INVESTMENT 11.60   3.8 3.09 0.82 6.99
MEDLEY CAPITAL 3.21   0.0 -1.63 0.20 6.35
MAIN STREET CAPITAL 37.72   13.4 2.81 2.40 6.31
PENNANTPARK FLOATING RATE CAPITAL 12.85   13.7 0.94 0.76 5.88

GARRISON CAPITAL - GARS
GARRISON CAPITAL - GARS  


Older articles featuring Garrison Capital (GARS):
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Dividends By The Numbers In 2018
Monroe Capital Offers 15% Yield Due To Portfolio Credit Issues
Your 50 Financial WallStars Show Bountiful Yields With Net Gains For November 2019
Why I Sold This 11.1% Yielding BDC That Could Now Be A 'Buy'
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This Stable 10.1% Yielding BDC Is A Strong Buy At These Levels
14.5% Yielding ETN: Time To Buy Or Take Profits?

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