The third-largest BDC in the market, FS KKR Capital (NYSE:FSK), is trading at an unreasonably large discount to net asset value, despite management doing a solid job in growing its NII. The BDC is focused on senior secured loans, has good portfolio diversification and grows its income consistently. Despite those accomplishments, FS KKR Capital’s shares are priced at a 20% discount to net asset value. I see potential for the gap between net asset value and share price to close over the long term if the BDC can maintain its current level of dividend coverage.
