Barings Bdc (NYSE:BBDC) vs. FS KKR Capital (NYSE:FSK) Head-To-Head Review

Barings Bdc (NYSE:BBDC) and FS KKR Capital (NYSE:FSK) are both finance companies, but which is the superior business? We will contrast the two companies based on the strength of their dividends, profitability, risk, valuation, institutional ownership, analyst recommendations and earnings.

Dividends

Barings Bdc pays an annual dividend of $1.04 per share and has a dividend yield of 11.3%. FS KKR Capital pays an annual dividend of $2.56 per share and has a dividend yield of 17.5%. Barings Bdc pays out 107.2% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. FS KKR Capital pays out 263.9% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Barings Bdc has increased its dividend for 3 consecutive years.

Risk & Volatility

Barings Bdc has a beta of 0.61, suggesting that its stock price is 39% less volatile than the S&P 500. Comparatively, FS KKR Capital has a beta of 0.84, suggesting that its stock price is 16% less volatile than the S&P 500.

Insider & Institutional Ownership

44.1% of Barings Bdc shares are held by institutional investors. Comparatively, 36.3% of FS KKR Capital shares are held by institutional investors. 0.5% of Barings Bdc shares are held by company insiders. Comparatively, 0.2% of FS KKR Capital shares are held by company insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a stock will outperform the market over the long term.

Profitability

This table compares Barings Bdc and FS KKR Capital’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Barings Bdc	36.01%	10.11%	4.30%
FS KKR Capital	17.24%	5.63%	2.49%

Analyst Ratings

This is a summary of current recommendations and price targets for Barings Bdc and FS KKR Capital, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Barings Bdc	0	2	2	0	2.50
FS KKR Capital	0	8	0	0	2.00

Barings Bdc currently has a consensus target price of $9.67, indicating a potential upside of 4.65%. FS KKR Capital has a consensus target price of $17.50, indicating a potential upside of 19.56%. Given FS KKR Capital’s higher possible upside, analysts plainly believe FS KKR Capital is more favorable than Barings Bdc.

Earnings and Valuation

This table compares Barings Bdc and FS KKR Capital”s gross revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Barings Bdc	$286.17 million	3.39	$110.29 million	$0.97	9.52
FS KKR Capital	$1.72 billion	N/A	$585.00 million	$0.97	15.09

FS KKR Capital has higher revenue and earnings than Barings Bdc. Barings Bdc is trading at a lower price-to-earnings ratio than FS KKR Capital, indicating that it is currently the more affordable of the two stocks.

Summary

Barings Bdc beats FS KKR Capital on 9 of the 15 factors compared between the two stocks.

About Barings Bdc

Barings BDC, Inc. is a publicly traded, externally managed investment company that has elected to be treated as a business development company under the Investment Company Act of 1940. It seeks to invest primarily in senior secured loans, first lien debt, unitranche, second lien debt, subordinated debt, equity co-investments and senior secured private debt investments in private middle-market companies that operate across a wide range of industries. It specializes in mezzanine, leveraged buyouts, management buyouts, ESOPs, change of control transactions, acquisition financings, growth financing, and recapitalizations in lower middle market, mature, and later stage companies. It invests in manufacturing and distribution; business services and technology; transportation and logistics; consumer product and services. It invests in United States. It invests in companies with EBITDA of $10 million to $75 million, typically in private equity sponsor backed.

About FS KKR Capital

FS KKR Capital Corp. is a business development company specializing in investments in debt securities. It provides customized credit solutions to private middle market U.S. companies. It invest primarily in the senior secured debt and, to a lesser extent, the subordinated debt of private middle market U.S. companies. It seeks to purchase interests in loans through secondary market transactions or directly from the target companies as primary market investments. It also seeks to invest in first lien senior secured loans, second lien secured loans and, to a lesser extent, subordinated loans, or mezzanine loans. In connection with the debt investments, the firm also receives equity interests such as warrants or options as additional consideration. It also seek to purchase minority interests in the form of common or preferred equity in our target companies, either in conjunction with one of the debt investments or through a co-investment with a financial sponsor. Additionally, on an opportunistic basis, the fund may also invest in corporate bonds and similar debt securities. The fund does not seek to invest in start-up companies, turnaround situations, or companies with speculative business plans. It seeks to invest in small and middle-market companies based in United States. The fund seeks to invest in firms with annual revenue between $10 million to $2.5 billion. It focus on providing customized one-stop credit solutions to private upper middle market companies with annual EBITDA of $50 million to $100 million at the time of investment. It seeks to exit from securities by selling them in a privately negotiated over- the- counter market. For any investments that are not able to be sold within the secondary market, the firm seeks to exit such investments through repayment, an initial public offering of equity securities, merger, sale or recapitalization.