Comparing Ares Capital and FS KKR Capital: Which is the Smarter Investment?
Originally Published 2 years ago — by The Motley Fool
Ares Capital and FS KKR Capital are both business development corporations (BDCs) that provide funding to middle-market companies in the U.S. These companies offer high dividend yields due to their regulated investment company status. Ares Capital has a longer track record and a portfolio focused on software, services, and healthcare, while FS KKR has a higher dividend yield and a portfolio concentrated in software, capital goods, and healthcare. Ares Capital has a larger percentage of first lien senior secured loans in its portfolio, while FS KKR trades at a discount to its net asset value. Overall, FS KKR has a slight edge due to its higher dividend yield and improving investment portfolio.