FS KKR Capital: High Margin Of Safety

The Asian Investor31.61K FollowersFollow5ShareSavePlay(9min)CommentsSummaryFS KKR Capital saw an increase in its non-accrual ratio to 3.4% (FV) in Q4'25 but restored its dividend coverage ratio to 100%, despite a ~31% dividend cut Y/Y.FSK trades at a deep 48% discount to NAV, reflecting ongoing asset quality concerns and NII contraction.Lower expected base rates as well as SaaS fears have destabilized investor sentiment lately, creating a contrarian entry opportunity for high-yield income investors.Massive 48% NAV discount implies a very high margin of safety for investors, even when considering a higher-than-average non-accrual ratio.FSK’s revaluation catalyst is a sustained reduction in non-accruals and improved loan portfolio performance. Guido Mieth/DigitalVision via Getty Images FS KKR Capital (FSK) supported its dividend with net investment income in Q4'25 but suffered headwinds in terms of its non-accrual ratio... which has pretty much consistently been a thorn in the investment firm'sThis article was written byThe Asian Investor31.61K FollowersFollowI am interested in a lot of technology and AI stocks like Google, Nvidia, AMD, Tesla and Amazon.Analyst’s Disclosure: I/we have a beneficial long position in the shares of FSK, ARCC, OBDC, BXSL, HTGC either through stock ownership, options, or other derivatives. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article. Seeking Alpha's Disclosure: Past performance is no guarantee of future results. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. Any views or opinions expressed above may not reflect those of Seeking Alpha as a whole. Seeking Alpha is not a licensed securities dealer, broker or US investment adviser or investment bank. Our analysts are third party authors that include both professional investors and individual investors who may not be licensed or certified by any institute or regulatory body.