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Blue Owl Capital (OBDC)
NYSE:OBDC
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Blue Owl Capital
(NYSE:OBDC)
69Neutral
Positive Factors
Merger benefits
The merger with OBDE positions OBDC as the second largest publicly traded BDC, with total assets exceeding $18.5 billion, providing strategic and financial benefits such as greater scale, stronger credit quality, expense savings, and optimized funding costs.
Valuation
OBDC is trading below book value, presenting an attractive risk/reward opportunity and potential for healthy revaluation.
Negative Factors
Portfolio yield
The portfolio yield declined due to lower base rates.
Valuation concerns
The stock is still trading at sub-1x book value, raising concerns about its current valuation.
Blue Owl Capital (OBDC) vs. S&P 500 (SPY)
Market Cap
$7.19B
Dividend Yield10.79%
Average Volume (3M)4.11M
Price to Earnings (P/E)9.2
Beta (1Y)0.65
Revenue Growth-1.29%
EPS Growth-24.99%
CountryUS
EmployeesN/A
SectorFinancial
Sector Strength86
IndustryFinancial - Credit Services
Share Statistics
EPS (TTM)0.41
Shares Outstanding511,046,230
10 Day Avg. Volume2,085,118
30 Day Avg. Volume4,111,943
Financial Highlights & Ratios
PEG RatioN/A
Price to Book (P/B)N/A
Price to Sales (P/S)0.00
Price to Cash Flow (P/CF)0.00
P/FCF Ratio0.00
Enterprise Value/Market Cap1.79
Enterprise Value/RevenueN/A
Enterprise Value/Gross Profit8.90
Enterprise Value/EbitdaN/A
Forecast
1Y Price Target
$15.97Price Target Upside15.06% Upside
Rating ConsensusStrong Buy
Number of Analyst Covering8
Blue Owl Capital Business Overview & Revenue Model
Company DescriptionOwl Rock Capital Corporation is a business development company. The fund makes investments in senior secured or unsecured loans, subordinated loans or mezzanine loans and also considers equity-related securities including warrants and preferred stocks also pursues preferred equity investments and common equity investments. Within private equity, it seeks to invest in growth, acquisitions, market or product expansion, refinancings and recapitalizations. It seeks to invest in middle market companies based in the United States, with EBITDA between $10 million and $250 million annually and/or annual revenue of $50 million and $2.5 billion at the time of investment.
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 displays a robust financial structure with strong profitability and a debt-free balance sheet in 2024. Revenue growth has been significant historically, but recent revenue decline and cash flow fluctuations highlight areas for potential improvement.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.―
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
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.―
| 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
13.88
Price Trends
14.15
Negative
14.39
Negative
14.17
Negative
Market Momentum
-0.06
Negative
48.64
Neutral
19.40
Positive
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 13.88 is above the 20-day moving average (MA) of 13.81, below the 50-day MA of 14.15, and below the 200-day MA of 14.17, indicating a neutral trend. The MACD of -0.06 indicates Negative momentum. The RSI at 48.64 is Neutral, neither overbought nor oversold. The STOCH value of 19.40 is Positive, 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 |
|---|---|---|---|---|---|---|---|
74 Outperform | $5.95B | 21.70 | 13.70% | 1.11% | 5.06% | 21.62% | |
72 Outperform | $5.77B | 21.21 | 17.24% | ― | 13.77% | 20.95% | |
69 Neutral | $7.19B | 9.22 | 9.94% | 10.79% | -1.29% | -24.99% | |
69 Neutral | $10.20B | 24.40 | 3.84% | 3.69% | -2.90% | -43.64% | |
68 Neutral | $5.76B | 10.36 | 17.46% | 8.54% | 9.07% | ― | |
66 Neutral | $6.55B | 11.23 | 27.60% | 1.52% | -0.70% | -12.72% | |
64 Neutral | $12.54B | 9.79 | 7.92% | 16985.69% | 12.58% | -6.07% |
* Financial Sector Average
Performance Comparison
OBDC
Blue Owl Capital
13.88
-0.58
-4.01%
CACC
Credit Acceptance
493.50
-30.32
-5.79%
FCFS
FirstCash
133.93
14.97
12.58%
SLM
SLM
31.96
10.45
48.58%
ALLY
Ally Financial
33.50
-5.35
-13.77%
OMF
OneMain Holdings
50.02
1.75
3.63%
Blue Owl Capital Earnings Call Summary
Earnings Call Date:May 07, 2025
(Q1-2025)
| % Change Since: 1.24%|
Next Earnings Date:Aug 06, 2025
Earnings Call Sentiment Neutral
The earnings call highlighted strong portfolio performance, successful merger benefits, and a solid financial position. However, there are challenges due to economic uncertainties and slight declines in net asset value and nonrecurring income. Despite these challenges, the overall position and proactive measures suggest resilience.Q1-2025 Updates
Positive Updates
Strong Portfolio Performance
Generated an ROE of 10.2%, marking the 11th consecutive double-digit ROE. The portfolio's credit quality remains solid with a low nonaccrual rate well below the industry average.
Successful Merger Completion
Successfully completed the merger between OBDC and OBDE on January 13, which has led to operational efficiencies and a combined strong financial position.
Increased First Lien Investments
Over 90% of first quarter direct loan originations were first lien investments. First lien investments have grown from 73% to 77% of the portfolio over the last year.
Supplemental Dividend Declared
Declared a $0.01 supplemental dividend based on first quarter results, with a second quarter base dividend of $0.37, supported by adjusted earnings with 106% dividend coverage.
Strong Balance Sheet and Liquidity
Ended the quarter with over $3 billion of total cash and facility capacity, providing more than ample unfunded capacity to meet near-term funding needs.
Negative Updates
Slight Decline in NAV
Net asset value per share was $15.14, down $0.12 from the last quarter, primarily due to changes in credit spreads and write-downs on a small number of investments.
Reduction in Nonrecurring Income
Experienced a lower level of one-time nonrecurring income compared to the fourth quarter and a small amount of spread compression of approximately 10 basis points.
Challenging Economic Environment
Uncertainty around tariff policy and a muted M&A environment are causing concerns. The economic outlook remains unclear with potential recessionary pressures.
Company Guidance
During Blue Owl Capital Corporation's first quarter 2025 earnings call, the company provided guidance emphasizing its strong portfolio performance despite a more normalized earnings environment. The company reported a return on equity (ROE) of 10.2% and adjusted net investment income (NII) of $0.39 per share. The net asset value (NAV) per share was $15.14, slightly down from the previous quarter. Blue Owl noted a decrease in nonrecurring income and the impact of previous interest rate cuts. The nonaccrual rate remained low at 0.8% at fair value and 1.4% at cost, reflecting solid credit quality. The portfolio is largely composed of first lien investments, which increased from 73% to 77% over the past year. Blue Owl's leverage at the end of the quarter was 1.26x, slightly above its target range, with expectations to return within target in the second quarter. The company declared a $0.01 supplemental dividend and a second quarter base dividend of $0.37 per share, supported by a healthy spillover income of approximately $0.34. Management highlighted its cautious approach amidst economic uncertainties, focusing on resilient sectors and maintaining a strong balance sheet to navigate potential market volatility.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.
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.