FS KKR Capital (NYSE:FSK) & State Street (NYSE:STT) Head to Head Survey

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

Profitability

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

	Net Margins	Return on Equity	Return on Assets
State Street	15.02%	15.26%	0.96%
FS KKR Capital	-28.52%	9.70%	4.14%

Insider & Institutional Ownership

87.4% of State Street shares are owned by institutional investors. Comparatively, 36.3% of FS KKR Capital shares are owned by institutional investors. 0.3% of State Street shares are owned by company insiders. Comparatively, 0.2% of FS KKR Capital shares are owned by company insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a company is poised for long-term growth.

Dividends

State Street pays an annual dividend of $3.36 per share and has a dividend yield of 1.8%. FS KKR Capital pays an annual dividend of $1.76 per share and has a dividend yield of 15.6%. State Street pays out 29.6% of its earnings in the form of a dividend. FS KKR Capital pays out -130.4% of its earnings in the form of a dividend. Both companies have healthy payout ratios and should be able to cover their dividend payments with earnings for the next several years. State Street has increased its dividend for 13 consecutive years. FS KKR Capital is clearly the better dividend stock, given its higher yield and lower payout ratio.

Risk and Volatility

State Street has a beta of 1.41, meaning that its share price is 41% more volatile than the S&P 500. Comparatively, FS KKR Capital has a beta of 0.83, meaning that its share price is 17% less volatile than the S&P 500.

Analyst Recommendations

This is a summary of current ratings and recommmendations for State Street and FS KKR Capital, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
State Street	0	5	8	3	2.88
FS KKR Capital	1	7	0	0	1.88

State Street presently has a consensus price target of $185.38, indicating a potential upside of 1.54%. FS KKR Capital has a consensus price target of $11.43, indicating a potential upside of 1.46%. Given State Street’s stronger consensus rating and higher probable upside, equities research analysts clearly believe State Street is more favorable than FS KKR Capital.

Valuation and Earnings

This table compares State Street and FS KKR Capital”s top-line revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
State Street	$22.63 billion	2.22	$2.94 billion	$11.34	16.10
FS KKR Capital	$1.52 billion	2.05	$11.00 million	($1.35)	-8.34

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

Summary

State Street beats FS KKR Capital on 15 of the 18 factors compared between the two stocks.

About State Street

State Street Corporation, through its subsidiaries, provides a range of financial products and services to institutional investors worldwide. The company offers investment servicing products and services, including custody, accounting, regulatory reporting, investor, and performance and analytics; middle office products, such as IBOR, transaction management, loans, cash, derivatives and collateral, record keeping, and client reporting and investment analytics; finance leasing; foreign exchange, and brokerage and other trading services; securities finance and enhanced custody products; deposit and short-term investment facilities; investment manager and alternative investment manager operations outsourcing; performance, risk, and compliance analytics; and financial data management to support institutional investors. It also engages in the provision of portfolio management and risk analytics, as well as trading and post-trade settlement services with integrated compliance and managed data. In addition, the company offers investment management strategies and products, such as core and enhanced indexing, multi-asset strategies, active quantitative and fundamental active capabilities, and alternative investment strategies. Further, it provides services and solutions, including environmental, social, and governance investing; defined benefit and defined contribution; and global fiduciary solutions, as well as exchange-traded funds under the SPDR ETF brand. The company provides its products and services to mutual funds, collective investment funds, UCITS, hedge funds and other investment pools, corporate and public retirement plans, insurance companies, foundations, endowments, and investment managers. State Street Corporation was founded in 1792 and is headquartered in Boston, Massachusetts.

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.