Comparing FS KKR Capital (NYSE:FSK) and TriplePoint Venture Growth BDC (NYSE:TPVG)

TriplePoint Venture Growth BDC (NYSE:TPVG) and FS KKR Capital (NYSE:FSK) are both finance companies, but which is the better investment? We will compare the two businesses based on the strength of their profitability, earnings, institutional ownership, dividends, analyst recommendations, valuation and risk.

Profitability

This table compares TriplePoint Venture Growth BDC and FS KKR Capital’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
TriplePoint Venture Growth BDC	42.16%	13.78%	6.32%
FS KKR Capital	13.24%	6.24%	2.75%

Dividends

TriplePoint Venture Growth BDC pays an annual dividend of $0.92 per share and has a dividend yield of 15.6%. FS KKR Capital pays an annual dividend of $2.56 per share and has a dividend yield of 16.8%. TriplePoint Venture Growth BDC pays out 88.5% 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 328.2% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future.

Analyst Ratings

This is a summary of current recommendations and price targets for TriplePoint Venture Growth BDC and FS KKR Capital, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
TriplePoint Venture Growth BDC	2	4	0	0	1.67
FS KKR Capital	2	5	0	0	1.71

TriplePoint Venture Growth BDC currently has a consensus target price of $6.75, indicating a potential upside of 14.60%. FS KKR Capital has a consensus target price of $18.42, indicating a potential upside of 21.12%. Given FS KKR Capital’s stronger consensus rating and higher possible upside, analysts clearly believe FS KKR Capital is more favorable than TriplePoint Venture Growth BDC.

Risk & Volatility

TriplePoint Venture Growth BDC has a beta of 1.48, indicating that its share price is 48% more volatile than the S&P 500. Comparatively, FS KKR Capital has a beta of 0.95, indicating that its share price is 5% less volatile than the S&P 500.

Insider and Institutional Ownership

12.8% of TriplePoint Venture Growth BDC shares are held by institutional investors. Comparatively, 36.3% of FS KKR Capital shares are held by institutional investors. 1.5% of TriplePoint Venture Growth 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, large money managers and endowments believe a company is poised for long-term growth.

Earnings & Valuation

This table compares TriplePoint Venture Growth BDC and FS KKR Capital”s revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
TriplePoint Venture Growth BDC	$108.65 million	2.19	$32.05 million	$1.04	5.66
FS KKR Capital	$1.72 billion	N/A	$585.00 million	$0.78	19.49

FS KKR Capital has higher revenue and earnings than TriplePoint Venture Growth BDC. TriplePoint Venture Growth 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.

About TriplePoint Venture Growth BDC

TriplePoint Venture Growth BDC Corp. is a business development company specializing investments in venture capital-backed companies at the growth stage investments. It also provides debt financing to venture growth space companies which includes growth capital loans, secured and customized loans, equipment financings, revolving loans and direct equity investments. The fund seeks to invest in e-commerce, entertainment, technology and life sciences sector. Within technology the areas of focus include: Security, wireless communication equipments, network system and software, business applications software, conferencing equipments/services .big data, cloud computing, data storage, electronics, energy efficiency, hardware, information services, internet and media, networking, semiconductors, software, software as a service, and other technology related subsectors and within life sciences the areas of focus include: biotechnology, bio fuels/bio mass, diagnostic testing and bioinformatics, drug delivery, drug discovery, healthcare information systems, healthcare services, medical, surgical and therapeutic devices, pharmaceuticals and other life science related subsectors. Within growth capital loans it invests between $5 million and $50 million, for equipment financings it invests between $5 million and $25 million, for revolving loans it invests between $1 million and $25 million, and for direct equity investments it may invest between $0.1 million and $5 million (generally not exceeding 5% of the company’s total equity). The debt financing products are typically structured as lines of credit and it invests through warrants and secured loans. It targeted returns between 10% and 18%. It does not take board seat in the company.

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.