FSK

FS KKR Capital (FSK) came out with quarterly earnings of $0.46 per share, beating the Zacks Consensus Estimate of $0.4 per share. This compares to earnings of $0.57 per share a year ago.

The Dividend Harvesting Portfolio outperformed during a tech-led market selloff, benefiting from diversification and a focus on recurring, reinvested income. I added to positions in GPIQ and FSK, capitalizing on tech weakness and deep discounts, with forward annualized dividend income now at $3,464.13 (8.35% yield). Portfolio composition remains balanced across equities, ETFs, REITs, CEFs, and BDCs, with a long-term goal of equal sector weighting and growing energy exposure.

Here at Zacks, our focus is on the proven Zacks Rank system, which emphasizes earnings estimates and estimate revisions to find great stocks. Nevertheless, we are always paying attention to the latest value, growth, and momentum trends to underscore strong picks.

Two opportunities offer 15%+ dividend yields while trading at approximately 45% discounts to their underlying net asset values. Both appear incredibly cheap, but their underlying fundamentals tell dramatically different stories. I explain why I believe one offers a rare opportunity to lock in enormous income and substantial upside, while the other could be a dangerous value trap.

Five major BDCs—Blue Owl Technology Finance Corp., FS KKR Capital Corp, Morgan Stanley Direct Lending Fund, Blue Owl Capital Corporation, and Oaktree Specialty Lending Corporation—trade at steep discounts to NAV, implying extreme loan losses not reflected in credit performance. Current market prices require annualized loan losses far exceeding historical peaks, despite portfolios of senior secured, diversified loans and low non-accruals. Buybacks at deep discounts signal management confidence in loan valuations, with OTF and FSK notably active in repurchasing shares.

BDC valuations have dropped to levels seen only a few times in the sector's history, which creates a rare entry point for patient investors. The usual household names may not be the safe haven many assume, especially as a credit cycle looms. I highlight 2 lesser-known BDCs that come out ahead on fees, portfolio quality and leverage.

Here at Zacks, our focus is on the proven Zacks Rank system, which emphasizes earnings estimates and estimate revisions to find great stocks. Nevertheless, we are always paying attention to the latest value, growth, and momentum trends to underscore strong picks.

PHILADELPHIA and NEW YORK, Oct. 8, 2026 /PRNewswire/ --FS KKR Capital Corp. (NYSE: FSK) ("FSK" or the "Company") announced today that its board of directors has declared (i) a fourth quarter 2026 distribution on shares of the Company's common stock of $0.44 per share and (ii) a special distribution on shares of the Company's common stock of $0.20 per share, which represents a portion of the Company's estimated undistributed taxable income. FSK also announced that it will host its third quarter 2026 results conference call via live webcast on Thursday, November 5, 2026 at 9:00 a.m.

FSK KKR Capital Corp. trades at a 33% discount to NAV but faces persistent credit quality issues and NAV erosion. Despite recent outperformance and a double-digit yield, FSK's high non-accruals and declining investment income raise concerns about dividend sustainability. Management's incentive fee waiver and continued high non-accruals signal elevated risk of another dividend cut in the near term.

FSK remains a hold, despite a recent 14% price jump post-Q2 2026 earnings. FSK's NAV dropped over $0.50 per share in one quarter, driven by realized and unrealized portfolio losses. Dividend coverage is narrow and currently aided by a temporary incentive fee waiver, which expires after three more quarters.