ARCC - Blue Owl Capital Is Still One Of My Favorite BDCs Yielding Over 9%
2024-05-06 09:00:00 ET
Summary
- Blue Owl Capital Corporation remains attractive as lending from traditional financial institutions remains restrictive, allowing BDCs to originate more loans at higher rates.
- OBDC has shown consistent growth in net investment income and net asset value, leading to regular and special dividends for shareholders.
- While there are risks to investing in OBDC, such as the Fed keeping rates high or cutting rates too quickly, the current trajectory is bullish for BDCs, including OBDC.
Another FOMC meeting and press conference have occurred, and rates remain unchanged. While we gained some clarity, it looks like higher for longer is the new normal. I believe this is bullish for business development corporations (BDCs) as lending remains restrictive from traditional financial institutions. This should allow BDCs to originate more loans at higher rates and produce a longer runway for generating net investment income (NII). Blue Owl Capital Corporation (OBDC) is one of my favorite BDCs, and I believe shares will remain attractive as they get back to pre-pandemic levels. I am bullish on BDCs in general, but OBDC is at the top of the list. OBDC has increased its NII and net asset value (NAV) quarter after quarter, and this has translated into dividend increases and special dividends being paid. While shares have been steadily rebounding, I think there is more value to be unlocked, and OBDC is in a position where it can continue to generate a large dividend yield for its shareholders....
Blue Owl Capital Is Still One Of My Favorite BDCs Yielding Over 9%