FS KKR Capital

FSK

Market cap $3.02B

A near 50% discount and a 17% yield look irresistible.

FS KKR Capital remains a sell as persistent NAV declines and weak net investment income signal ongoing portfolio challenges. FSK's 16.2% dividend yield follows a 29.7% payout cut, reflecting unsustainable prior distributions and limited earnings support. Portfolio struggles include negative net investment activity, higher non-accruals (3.4%), and a rising debt-to-equity ratio of 1.22x.

FS KKR Capital Corp. faced a challenging fiscal 2025 fourth quarter with a 29.7% dividend cut and a 15% stock price decline in response. FSK's net investment income, NAV per share, and originations all declined, while nonaccrual rates rose to 3.4% at fair value. The dividend is now 116% covered, yielding 16%, but credit quality deterioration and muted originations raise concerns.

FS KKR Capital Corp (FSK) Q4 2025 Earnings Call Transcript

The headline numbers for FS KKR Capital (FSK) give insight into how the company performed in the quarter ended December 2025, but it may be worthwhile to compare some of its key metrics to Wall Street estimates and the year-ago actuals.

PHILADELPHIA and NEW YORK, Feb. 25, 2026 /PRNewswire/ -- FS KKR Capital Corp. (NYSE: FSK), or the Company, today announced its financial and operating results for the quarter and year ended December 31, 2025, and that its board of directors has declared a first quarter 2026 distribution of $0.48 per share. Financial and Operating Highlights for the Quarter Ended December 31, 2025 (1) Net investment income of $0.48 per share, compared to $0.57 per share for the quarter ended September 30, 2025 Adjusted net investment income(2) of $0.52 per share, compared to $0.57 per share for the quarter ended September 30, 2025 Net asset value of $20.89 per share, compared to $21.99 per share as of September 30, 2025 and $23.64 per share as of December 31, 2024 Total net realized and unrealized loss of $0.89 per share, compared to a total net realized and unrealized gain of $0.19 per share for the quarter ended September 30, 2025 Adjusted net realized and unrealized loss(2) of $0.88 per share, compared to adjusted net realized and unrealized gain of $0.21 per share for the quarter ended September 30, 2025 Earnings (Loss) per Share of ($0.41), compared to Earnings (Loss) per Share of $0.76 for the quarter ended September 30, 2025 Total purchases of $1,098 million versus $1,334 million of sales and repayments, including $528 million of sales to the Company's joint venture, Credit Opportunities Partners JV, LLC Net debt to equity ratio(3) as of December 31, 2025 was 122%, compared to 116% as of September 30, 2025 Paid distributions to stockholders totaling $0.70 per share(4) Financial and Operating Highlights for the Year Ended December 31, 2025 (1) Net investment income of $2.34 per share, compared to $2.90 per share for the year ended December 31, 2024 Adjusted net investment income(2) of $2.34 per share, compared to $2.88 per share for the year ended December 31, 2024 Total net realized and unrealized loss of $2.30 per share, compared to a total net realized and unrealized loss of $0.81 per share for the year ended December 31, 2024 Adjusted net realized and unrealized loss(2) of $2.24 per share, compared to adjusted net realized and unrealized loss of $0.72 per share for the year ended December 31, 2024 Paid cash distributions to stockholders totaling $2.80 per share(4) "As we conclude 2025 and begin looking forward to 2026, we acknowledge specific challenges associated with a few investments which impacted our results during the second and fourth quarters of the year," said Michael C.

There are multiple risks for your BDC investments now and three that specifically create risk for certain BDCs. Business development companies offer high yields but carry significant, often misunderstood risks, especially in falling interest rate environments. Volatile interest rates can damage BDC profitability and distributable income, causing dividend cuts and share price declines.

Besides Wall Street's top-and-bottom-line estimates for FS KKR Capital (FSK), review projections for some of its key metrics to gain a deeper understanding of how the company might have fared during the quarter ended December 2025.

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