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Blue Owl Capital Corporation (OBDC)
:OBDC
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Blue Owl Capital
(NYSE:OBDC)75Outperform
Positive Factors
Financial Performance
OBDC is expected to continue delivering industry-leading results, translating into strong value creation for shareholders.
Merger and Acquisitions
The merger completed with OBDE positions OBDC as the second largest publicly traded BDC, with total assets exceeding $18.5 billion.
Negative Factors
Earnings Outlook
The price objective was adjusted to $16.25 from $17 given the near-term impact of the OBDE merger and lower earnings outlook.
Blue Owl Capital (OBDC) vs. S&P 500 (SPY)
Market Cap
$7.65B
Dividend Yield9.67%
Average Volume (3M)3.42M
Price to Earnings (P/E)9.8
Beta (1Y)0.69
Revenue Growth-1.29%
EPS Growth-24.99%
CountryUS
EmployeesN/A
SectorFinancial
Sector Strength93
IndustryCredit Finance
Share Statistics
EPS (TTM)1.52
Shares Outstanding510,847,630
10 Day Avg. Volume3,769,594
30 Day Avg. Volume3,421,988
Financial Highlights & Ratios
PEG RatioN/A
Price to Book (P/B)N/A
Price to Sales (P/S)10.02
Price to Cash Flow (P/CF)4.40
P/FCF Ratio4.30
Enterprise Value/Market CapN/A
Enterprise Value/RevenueN/A
Enterprise Value/Gross ProfitN/A
Enterprise Value/EbitdaN/A
Forecast
1Y Price Target
$16.46Price Target Upside9.88% Upside
Rating ConsensusStrong Buy
Number of Analyst Covering6
Blue Owl Capital Business Overview & Revenue Model
Company DescriptionOwl Rock Capital Corp, non traded business development company, seeks investment opportunities in middle market companies located in the US with an EBITDA of $10 to $250 million and annual revenue of $50 million to $2.5 billion. It focuses on broad range of sectors including business services, healthcare services, pharma & healthcare technology, aerospace & defences, software & technology and manufacturing & industrials. The fund provides financing in the form of senior secured or unsecured loans, subordinated loans or mezzanine loans and a lesser extent, equity-related securities and warrants for growth, acquisitions, market or product expansion, re-financings and recapitalizations. Its investment size ranging from $20 to $250 million and it also acts as a lead investor.
How the Company Makes MoneyBlue Owl Capital makes money through a diversified revenue model that primarily includes management fees, performance-based fees, and investment income. The firm generates management fees by overseeing and managing assets for its clients across its various funds and investment vehicles. Performance-based fees are earned when the investments outperform certain benchmarks, aligning the firm's interests with those of its investors. Additionally, Blue Owl Capital earns investment income through the appreciation and returns on its proprietary investments and portfolio holdings. The firm's revenue is further supported by strategic partnerships and collaborations with financial institutions, enhancing its ability to access capital and investment opportunities.
Blue Owl Capital Financial Statement Overview
Summary
Blue Owl Capital shows strong profitability with a debt-free balance sheet, but recent revenue declines and cash flow fluctuations indicate potential risks.Income Statement
Blue Owl Capital demonstrates a solid gross profit margin, consistently high EBIT margins, and positive net profit margins over the years. However, there was a decline in Total Revenue from 2023 to 2024, indicating a potential concern in revenue growth. Despite this, the company has achieved significant revenue growth from 2020 to 2023.65
Positive
Balance Sheet
The balance sheet reflects a strong equity position with zero debt in 2024, enhancing the stability of the company. The equity ratio is healthy, and the return on equity is positive, showing efficient use of equity. However, the company previously had a high debt-to-equity ratio, which has been resolved by eliminating debt.70
Positive
Cash Flow
The cash flow analysis shows fluctuating operating cash flows, with a significant positive free cash flow in 2023 turning to a much lower free cash flow in 2024. The company has managed to maintain positive operating cash flow relative to net income, indicating operational efficiency, but the inconsistency over the recent years poses a risk to cash flow stability.60
Neutral
| Breakdown | ||||
| Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 | Dec 2020 |
|---|---|---|---|---|
| Income Statement | Total Revenue | |||
| 1.44B | 1.58B | 501.22M | 663.18M | 285.98M | Gross Profit |
| 1.44B | 1.18B | 194.37M | 380.74M | 178.54M | EBIT |
| 598.38M | 1.20B | 783.67M | 856.63M | 546.38M | EBITDA |
| 0.00 | 0.00 | 543.44M | 830.15M | 539.77M | Net Income Common Stockholders |
| 594.98M | 793.31M | 466.36M | 624.88M | 387.74M |
| Balance Sheet | Cash, Cash Equivalents and Short-Term Investments | |||
| 8.46M | 572.59M | 348.67M | 425.66M | 349.07M | Total Assets |
| 13.87B | 13.51B | 13.58B | 13.30B | 11.30B | Total Debt |
| 0.00 | 7.08B | 7.28B | 7.08B | 5.29B | Net Debt |
| -8.46M | 6.50B | 6.93B | 6.65B | 4.94B | Total Liabilities |
| 7.91B | 7.49B | 7.70B | 7.36B | 5.56B | Stockholders Equity |
| 5.95B | 6.02B | 5.88B | 5.94B | 5.75B |
| Cash Flow | Free Cash Flow | |||
| 160.22M | 1.14B | 217.27M | -1.23B | -1.56B | Operating Cash Flow |
| 160.22M | 1.14B | 217.27M | -1.23B | -1.56B | Investing Cash Flow |
| 0.00 | 0.00 | -206.52M | -1.62B | -2.07B | Financing Cash Flow |
| -305.72M | -921.04M | -219.33M | 1.32B | 1.60B |
Blue Owl Capital Technical Analysis
Negative
14.98
Price Trends
15.03
Negative
14.83
Positive
14.61
Positive
Market Momentum
0.07
Positive
44.29
Neutral
33.05
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For OBDC, the sentiment is Negative. The current price of 14.98 is below the 20-day moving average (MA) of 15.22, below the 50-day MA of 15.03, and above the 200-day MA of 14.61, indicating a neutral trend. The MACD of 0.07 indicates Positive momentum. The RSI at 44.29 is Neutral, neither overbought nor oversold. The STOCH value of 33.05 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for OBDC.
Blue Owl Capital Risk Analysis
Blue Owl Capital disclosed 105 risk factors in its most recent earnings report. Blue Owl Capital reported the most risks in the “Finance & Corporate” category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 0 New Risks
Blue Owl Capital Peers Comparison
Overall Rating
UnderperformOutperform
Sector (64)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
75 Outperform | $7.65B | 9.82 | 9.94% | 9.67% | -1.29% | -24.99% | |
73 Outperform | $78.68B | 19.24 | 26.53% | 1.28% | -20.40% | -13.30% | |
67 Neutral | $107.28B | 36.86 | 13.01% | 0.53% | 42.19% | -18.20% | |
67 Neutral | $905.51M | 11.28 | 9.83% | 10.52% | -11.85% | -3.73% | |
66 Neutral | $51.10B | 77.73 | 13.09% | 2.19% | 6.12% | -15.84% | |
65 Neutral | $193.19B | 43.77 | 33.81% | 2.49% | 21.25% | 97.42% | |
64 Neutral | $14.34B | 10.61 | 9.28% | 4.07% | 18.04% | -9.54% |
* Financial Sector Average
Performance Comparison
OBDC
Blue Owl Capital
14.98
1.47
10.88%
APO
Apollo Global Management
137.92
30.62
28.54%
KKR
KKR & Co
120.78
24.34
25.24%
BX
Blackstone Group
150.73
30.62
25.49%
ARES
Ares Management
160.99
28.66
21.66%
CGBD
TCG BDC
17.31
2.64
18.00%
Blue Owl Capital Earnings Call Summary
Earnings Call Date: Feb 19, 2025 | % Change Since: -3.91% | Next Earnings Date: May 7, 2025
Earnings Call Sentiment Positive
The earnings call highlighted strong financial performance, successful merger execution, and significant growth in direct lending and dividends. However, challenges such as disappointing M&A deal flow and lower interest rates were noted. Overall, the positive aspects, including portfolio resilience and expansion into new credit strategies, outweigh the challenges.Highlights
Strong Financial Performance
Generated strong fourth quarter and full year results with NII of $0.47 per share for Q4 and $1.89 per share for the full year. Achieved ROE of 12.4% for Q4 and 12.2% for the full year.
Record Dividends
Paid out record dividends totaling $1.72 per share for 2024, reflecting a nearly 10% increase year over year.
Successful Merger and Increased Scale
Completed merger with OBDE, making Blue Owl Capital Corporation the second-largest publicly traded BDC by total assets, improving trading liquidity and reducing financing costs.
Increase in Direct Lending
Committed over $27 billion in direct originations, roughly double from 2023, with significant first lien investments increasing from 68% to 76% of the portfolio.
Portfolio Quality and Resilience
Non-accrual rate remains low at 40 basis points, decreasing to 30 basis points post-merger. Portfolio companies' revenues and EBITDA increased in the mid to high single digits year over year.
Expansion into New Credit Strategies
Broadened credit platform by expanding into alternative and investment-grade credit as well as data centers.
Lowlights
Disappointing M&A Deal Flow
The year presented challenges with disappointing M&A deal flow and spread compression due to a strong broadly syndicated loan market.
Credit-Related Markdowns
Fourth quarter NAV per share decreased by two pennies from last quarter due to the impact of credit-related markdowns on certain investments.
Lower Interest Rates and Spreads
Lower interest rates and spreads impacted results, though offset by one-time income from repayments and dividends.
Company Guidance
In the recent earnings call, Blue Owl Capital Corporation highlighted several key metrics and achievements for the fourth quarter and full year of 2024. The company reported a strong net investment income (NII) of $0.47 per share for the quarter and $1.89 per share for the year, achieving a return on equity (ROE) of 12.4% for the quarter and 12.2% for the year. The net asset value (NAV) per share was $15.26 at quarter-end, consistent with the previous quarter. Blue Owl Capital also paid record dividends totaling $1.72 per share for the year, marking a nearly 10% increase year-over-year. The company's direct lending portfolio grew, with an average hold size in new deals rising from $200 million in 2021 to $350 million in 2024, while the total deal size increased from $600 million to over $1 billion. The nonaccrual rate remained well below industry averages, and the company maintained a selectivity rate of approximately 5% for new investments. After merging with Blue Owl Capital Corporation III (OBDE), the company emerged as the second-largest publicly traded business development company (BDC) by total assets, with improved trading liquidity and anticipated operational synergies.Blue Owl Capital Corporate Events
M&A TransactionsBusiness Operations and Strategy
Blue Owl Capital Strengthens Position with Major Merger
Positive
Jan 13, 2025
Blue Owl Capital Corporation has completed its merger with Blue Owl Capital Corporation III, resulting in OBDC becoming the second largest publicly traded business development company by total assets. The merger, which increases OBDC’s total assets to $18.6 billion and diversifies its portfolio across 232 companies, is expected to strengthen OBDC’s market position and enhance its ability to deliver attractive risk-adjusted returns. The merger terms included an exchange of OBDE shares for OBDC shares and cash in lieu of fractional shares, with legacy OBDC shareholders owning 76% of the combined entity. This strategic move aims to leverage enhanced scale and operational efficiencies while maintaining strong credit quality.
M&A TransactionsShareholder MeetingsDividends
Blue Owl Capital Announces Merger and Dividend Plans
Positive
Jan 8, 2025
Blue Owl Capital Corporation and Blue Owl Capital Corporation III announced the approval of their merger by shareholders, with an overwhelming majority supporting the proposals. The merger, expected to close around January 13, 2025, aims to create a more diversified business development company with enhanced scale and credit quality. The merger includes the distribution of a special and quarterly dividend by OBDE, highlighting the transaction’s immediate financial impact on stakeholders.
M&A TransactionsShareholder Meetings
Blue Owl Capital Merger Gains Proxy Advisory Support
Positive
Jan 3, 2025
Blue Owl Capital Corporation and Blue Owl Capital Corporation III have announced that leading independent proxy advisory firms ISS and Glass Lewis recommend shareholders vote in favor of their pending merger. The merger, which is expected to enhance scale and diversification, would result in the second-largest publicly traded business development company by total assets, potentially improving trading dynamics and achieving long-term expense savings. The companies emphasize the importance of shareholder voting ahead of upcoming meetings.
Glossary
OutperformA stock rated as "Outperform" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock is likely to deliver higher returns compared to the average returns of other stocks in the same sector or market index. Investors might consider this stock a good buying opportunity.
NeutralA stock rated as "Neutral" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly attractive nor unattractive for investment. Investors may consider holding onto the stock, as it is not expected to either significantly outperform or underperform the market.
UnderperformA stock rated as "Underperform" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock may deliver lower returns compared to the average returns of other stocks in the same sector or market index. Investors might consider selling the stock or avoiding it as an investment.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.