OCSL - Oaktree Specialty Lending: A Solid 11% Yield To Boost Your Income
2024-05-12 02:27:48 ET
Summary
- Oaktree Specialty Lending's dividend coverage metrics weakened in FQ2, but the company plans to lower its management fee to improve coverage.
- The BDC's loan quality has improved Q/Q. Originations remained strong and the company fully supported its $0.55 per-share dividend with NII.
- Base management fee reduction is set to boost NII by $0.03-0.04 per-share quarterly.
- Shares of Oaktree Specialty Lending remain a strong buy for dividend investors.
Oaktree Specialty Lending ( OCSL ) suffered weakness in its dividend coverage metrics for the quarter ending March. While the decline in the dividend coverage was not great, the BDC announced that it was lowering its management fee which is set to improve Oaktree Specialty Lending’s dividend coverage. As a result, I don’t expect the BDC to lower its dividend as the estimated impact of the management fee reduction is set to improve Oaktree Specialty Lending's dividend coverage metrics. The company is also seeing solid origination growth and the portfolio remained well-diversified in the last quarter. With shares currently trading at only a small premium to net asset value, I believe investors, despite a deterioration in dividend coverage, should remain invested here!...
Oaktree Specialty Lending: A Solid 11% Yield To Boost Your Income