Blue Owl Capital: A Rock Solid High-Yield BDC Play

Summary

• Blue Owl Capital remains a strong dividend play, with solid net investment income and a 1.08x dividend coverage ratio despite a rise in non-accruals.
• The recent merger boosted the BDC's portfolio value by 43% year-over-year, driving higher investment income and supporting the dividend.
• Shares still trade just below net asset value, offering potential upside if Blue Owl maintains high balance sheet quality.
• Risks include potential overpayment for future acquisitions, but strong balance sheet quality and a well-supported 10% yield make OBDC attractive for income investors.

HAKINMHAN

Blue Owl Capital (NYSE:OBDC) suffered an increase in its non-accrual percentage in the first-quarter, yet otherwise continues to make a robust value proposition for dividend investors. Blue Owl Capital had a dividend coverage ratio of 1.08X in the first-quarter, which

Analyst’s Disclosure:I/we have a beneficial long position in the shares of OBDC, ARCC, BXSL 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.