Oaktree Specialty Lending: Another Dividend Increase As Conservative Marks Push The NAV 5% Lower

Summary

  • We discuss Q2 results from OCSL and highlight the key income dynamics of the portfolio.
  • OCSL saw a small drop in adjusted net income due to lower OID acceleration and a temporary floating-rate mismatch between assets and liabilities.
  • NAV fell 5% which is very likely overstated versus the sector - we saw a similar NAV underperformance in 2020 which was subsequently reversed.
  • Portfolio quality remained good with zero non-accruals and continued realized gains.
  • OCSL hiked its dividend to $0.17 and trades at a 9.7% yield and a 102% valuation.
  • I do much more than just articles at Systematic Income: Members get access to model portfolios, regular updates, a chat room, and more. Learn More »

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This article was first released to Systematic Income subscribers and free trials on Aug 5.

In this article, we discuss Q2 results from the Business Development Company Oaktree Specialty Lending Corp (NASDAQ:OCSL). OCSL is a relatively large BDC

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This article was written by

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ADS Analytics is a team of analysts with experience in research and trading departments at several industry-leading global investment banks. They focus on generating income ideas from a range of security types including: CEFs, ETFs and mutual funds, BDCs as well as individual preferred stocks and baby bonds.

ADS Analytics runs the investing group Systematic Income which features 3 different portfolios for a range of yield targets as well interactive tools for investors, daily updates and a vibrant community.

Analyst’s Disclosure:I/we have a beneficial long position in the shares of OCSL either through stock ownership, options, or other derivatives. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

Seeking Alpha's Disclosure: Past performance is no guarantee of future results. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. Any views or opinions expressed above may not reflect those of Seeking Alpha as a whole. Seeking Alpha is not a licensed securities dealer, broker or US investment adviser or investment bank. Our analysts are third party authors that include both professional investors and individual investors who may not be licensed or certified by any institute or regulatory body.

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