BlackRock TCP Vs. Oaktree Specialty: Both Are Likely To Cut, One Of Them Sooner

Roberts Berzins, CFA profile picture
Roberts Berzins, CFA
7.49K Followers
(12min)

Summary

  • TCPC and OCSL provide massive dividends and trade below NAV.
  • I agree with the market that they have to be discounted below NAV.
  • In my view, this is not the case, where investors could count on high dividends remaining unchanged.
  • I would argue that both TCPC and OCSL will cut their dividends.
  • In this article, I compare them side by side, and share my views on which one of them is likely to cut first.
Piggy bank was cut off with cutting magic

Hiroshi Watanabe

Before we entered into Q3, 2024 earnings season, I issued a couple of articles on BDCs, which, in my view, had high probabilities of cutting their dividends in a foreseeable future.

BlackRock TCP Capital Corp (NASDAQ:TCPC) and Oaktree Specialty

This article was written by

Roberts Berzins, CFA profile picture
7.49K Followers
Roberts Berzins has over a decade of experience in the financial management helping top-tier corporates shape their financial strategies and execute large-scale financings. He has also made significant efforts to institutionalize REIT framework in Latvia to boost the liquidity of pan-Baltic capital markets. Other policy-level work includes the development of national SOE financing guidelines and framework for channeling private capital into affordable housing stock. Roberts is a CFA Charterholder, ESG investing certificate holder, has had an internship in Chicago board of trade (albeit, being resident and living in Latvia), and is actively involved in "thought-leadership" activities to support the development of pan-Baltic capital markets.

Analyst’s Disclosure: I/we have no stock, option or similar derivative position in any of the companies mentioned, and no plans to initiate any such positions within the next 72 hours. 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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