01. Blue Owl Capital Corporation (NYSE:OBDC)
Number of Hedge Fund Holders: 21
Blue Owl Capital Corporation (NYSE:OBDC) stands out as a prime candidate for inclusion in our list of ten best BDC stocks to invest in due to its robust investment strategy, impressive financial metrics, and attractive dividend yield. As a distinguished business development company (BDC), Blue Owl Capital specializes in a diverse range of direct and fund-of-fund investments. This includes senior secured, direct lending, and unsecured loans, as well as subordinated and mezzanine loans. Additionally, the company explores equity-related securities such as warrants and preferred stocks, and engages in various forms of preferred equity investments, unitranche, first lien, and second lien term loans. Blue Owl Capital Corporation (NYSE:OBDC) focuses on investing in middle-market and upper-middle-market companies across the United States, targeting firms with annual EBITDA ranging from $10 million to $250 million or annual revenues between $50 million and $2.5 billion.
Blue Owl Capital Corporation (NYSE:OBDC) recent Q2 2024 earnings report highlights its compelling fundamentals and investment appeal. The company reported a net investment income (NII) of $0.48 per share, reflecting a slight increase from the previous quarter, driven by strategic capital deployment and strong portfolio performance. With a net asset value (NAV) per share of $15.36, Blue Owl Capital Corporation (NYSE:OBDC) has consistently delivered a strong annualized return on equity (ROE) of 12.6%. This performance underscores the company’s effective management and the resilience of its investment portfolio. For Q2 2024, Blue Owl Capital Corporation (NYSE:OBDC) declared total dividends of $0.43 per share, which includes a regular dividend of $0.37 and a supplemental dividend of $0.06. This results in an attractive annualized dividend yield of over 11%, marking the sixth consecutive quarter of double-digit yields. This high dividend yield is a testament to Blue Owl Capital Corporation (NYSE:OBDC) robust earnings capabilities and its commitment to returning value to shareholders.
The company’s strategic merger with Blue Owl Capital Corporation III (OBDE) is poised to enhance its scale and diversification. The merger, expected to close in early 2025, will significantly increase Blue Owl Capital Corporation (NYSE:OBDC) portfolio size to approximately $17.7 billion, making it the second-largest publicly traded BDC by total assets. This consolidation is anticipated to improve liquidity, reduce costs, and provide better access to capital, further solidifying OBDC’s market position. Overall, Blue Owl Capital Corporation (NYSE:OBDC) strong financial metrics, impressive dividend yield, and strategic growth initiatives make it a compelling choice for investors seeking exposure to high-quality BDC stocks.
While we acknowledge the potential of OBDC to grow, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns and doing so within a shorter timeframe. If you are looking for an AI stock that is more promising than OBDC but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
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