Head-To-Head Comparison: Amalgamated Financial (NASDAQ:AMAL) versus FS KKR Capital (NYSE:FSK)

Amalgamated Financial (NASDAQ:AMAL) and FS KKR Capital (NYSE:FSK) are both finance companies, but which is the better investment? We will contrast the two businesses based on the strength of their valuation, risk, institutional ownership, dividends, earnings, analyst recommendations and profitability.

Insider & Institutional Ownership

75.9% of Amalgamated Financial shares are held by institutional investors. Comparatively, 36.3% of FS KKR Capital shares are held by institutional investors. 1.3% of Amalgamated Financial 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 large money managers, endowments and hedge funds believe a company will outperform the market over the long term.

Analyst Recommendations

This is a breakdown of recent recommendations and price targets for Amalgamated Financial and FS KKR Capital, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Amalgamated Financial	1	0	1	0	2.00
FS KKR Capital	2	5	0	0	1.71

Amalgamated Financial presently has a consensus price target of $33.00, suggesting a potential upside of 12.28%. FS KKR Capital has a consensus price target of $18.9167, suggesting a potential upside of 5.68%. Given Amalgamated Financial’s stronger consensus rating and higher probable upside, equities research analysts plainly believe Amalgamated Financial is more favorable than FS KKR Capital.

Profitability

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

	Net Margins	Return on Equity	Return on Assets
Amalgamated Financial	23.60%	15.21%	1.31%
FS KKR Capital	13.24%	6.24%	2.75%

Valuation & Earnings

This table compares Amalgamated Financial and FS KKR Capital”s top-line revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Amalgamated Financial	$434.51 million	2.04	$106.43 million	$3.34	8.80
FS KKR Capital	$315.00 million	15.92	$585.00 million	$0.78	22.95

FS KKR Capital has lower revenue, but higher earnings than Amalgamated Financial. Amalgamated Financial 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.

Dividends

Amalgamated Financial pays an annual dividend of $0.56 per share and has a dividend yield of 1.9%. FS KKR Capital pays an annual dividend of $2.56 per share and has a dividend yield of 14.3%. Amalgamated Financial pays out 16.8% of its earnings in the form of a dividend. 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. Amalgamated Financial has raised its dividend for 4 consecutive years.

Volatility & Risk

Amalgamated Financial has a beta of 0.89, indicating that its share price is 11% less volatile than the S&P 500. Comparatively, FS KKR Capital has a beta of 0.93, indicating that its share price is 7% less volatile than the S&P 500.

Summary

Amalgamated Financial beats FS KKR Capital on 11 of the 17 factors compared between the two stocks.

About Amalgamated Financial

Amalgamated Financial Corp. operates as the bank holding company for Amalgamated Bank that provides commercial and retail banking, investment management, and trust and custody services for commercial and retail customers in the United States. The company accepts various deposit products, including non-interest bearing accounts, interest-bearing demand products, savings accounts, money market accounts, NOW accounts, and certificates of deposit. It also provides various commercial loans comprising commercial and industrial, multifamily mortgage, and commercial real estate loans; residential mortgage loans; and retail loans, such as residential real estate, consumer solar, and consumer and other loans. In addition, the company offers online banking, bill payment, online cash management, and safe deposit box rental services; debit and ATM cards; and trust, custody, and investment management services comprising asset safekeeping, corporate actions, income collections, proxy, account transition, asset transfers, and conversion management services. Further, it provides investment products, such as funds spanning equity, fixed-income, real estate, and alternative investment products; and brokerage, asset management, and insurance products. Amalgamated Financial Corp. was founded in 1923 and is headquartered in New York, New York.

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.