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Owl Rock Capital Corporation (ORCC) Down 0.1% Since Last Earnings Report: Can It Rebound?

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A month has gone by since the last earnings report for Owl Rock Capital Corporation (ORCC - Free Report) . Shares have lost about 0.1% in that time frame, underperforming the S&P 500.

Will the recent negative trend continue leading up to its next earnings release, or is Owl Rock Capital Corporation due for a breakout? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at its most recent earnings report in order to get a better handle on the important catalysts.

Owl Rock Capital Q4 Earnings Beat Mark, Jump Y/Y

Owl Rock Capital reported fourth-quarter 2021 earnings per share of 35 cents, beating the Zacks Consensus Estimate of 33 cents on the back of higher investment income. The figure also increased from the year-ago quarter’s earnings of 29 cents per share.

In the quarter, the company’s total investment income was $281.6 million, up from the year-ago level of $221.3 million. The figure also beat the consensus mark of $268 million. An increase in the debt investment portfolio benefited the metric, which was partially offset by a decline in the portfolio's weighted average yield.

The strong fourth-quarter results were supported by higher income from interest, dividends, and other sources from non-controlled and non-affiliated investments. Also, better new investment commitments in the fourth quarter benefited the results.

Operating Details

Fourth-quarter total new investment commitments were $1,589.2 million, up from $1,527.4 million a year ago. Total new investment commitments for the full-year 2021 were $6,824.8 million across 67 new portfolio companies, up 98.1% year over year.

Owl Rock concluded the fourth quarter with investments in 143 portfolio companies, with an aggregate fair value of $12.7 billion. The average investment size in each portfolio company was $89.1 million (based on fair value) as of Dec 31, 2021.

Total expenses of $143.8 million in the fourth quarter rose from $106.7 million due to higher interest expenses, management fees, performance-based incentive fees and other operating expenses.

The company’s interest expenses of $60.1 million increased from $42.4 million due to higher average daily borrowings. However, the same was partly offset by a reduced average interest rate.

Net income for the fourth quarter was $174 million, down from $180.7 million a year ago due to lower net realized gains.

Dividend Update

Owl Rock declared a first-quarter dividend of 31 cents per share for its shareholders of record on Mar 31, 2022. The amount will be paid out on or before May 13.

Financial Update (as of Dec 31, 2021)

Owl Rock had cash and restricted cash worth $447.1 million at the end of the fourth quarter, sequentially down from $794.7 million.

The company exited the fourth quarter with $7.2 billion of debt, up from $7 billion at third-quarter end. Owl Rock Capital had $1.4 billion of undrawn capacity under its credit facilities. It currently has no debt maturities until December 2023.

It had total assets worth $13.3 billion, up 17.6% from the level at 2020 end.

How Have Estimates Been Moving Since Then?

It turns out, fresh estimates have trended downward during the past month.

VGM Scores

At this time, Owl Rock Capital Corporation has a poor Growth Score of F, however its Momentum Score is doing a lot better with a B. However, the stock was allocated a grade of D on the value side, putting it in the bottom 40% for this investment strategy.

Overall, the stock has an aggregate VGM Score of D. If you aren't focused on one strategy, this score is the one you should be interested in.

Outlook

Estimates have been broadly trending downward for the stock, and the magnitude of this revision has been net zero. Notably, Owl Rock Capital Corporation has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.


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