Blue Owl Capital Corporation reported solid third-quarter results, achieving a 12.4% return on equity (ROE) for the seventh consecutive quarter, supported by a robust portfolio of $13.4 billion in investments. The company declared a base dividend of $0.37 per share, payable in January 2025, and a supplemental dividend of $0.05, reflecting strong earnings momentum and a base dividend coverage of 127%. Management expressed confidence in sustaining these dividends through 2025, even as they navigate potential interest rate declines.
The firm’s portfolio remains resilient, with a low non-accrual rate of 0.7% and a growing focus on first lien investments, which now comprise 76% of the portfolio. Despite a subdued M&A environment, Blue Owl continues to find attractive investment opportunities, primarily through refinancing existing borrowers. Recent acquisitions, including Atalaya Capital Management and IPI Partners, further enhance their capabilities in alternative credit and data centers.
A key takeaway for investors is Blue Owl’s strategic positioning to maintain dividend stability and strong credit quality, even amid shifting interest rates, making it a noteworthy player in the business development company (BDC) landscape.
Source: fool.com