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Blue Owl Capital (OBDC) Q3 Earnings Beat, Dividend Raised
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Blue Owl Capital Corporation (OBDC - Free Report) reported third-quarter 2023 earnings per share of 49 cents, which beat the Zacks Consensus Estimate by 4.3%. The bottom line also improved 32.4% year over year.
The total investment income of OBDC amounted to $399 million, which increased 27.1% year over year. The top line beat the Zacks Consensus Estimate by 1.9%.
The strong third-quarter results of OBDC were supported by growth in the portfolio, high interest rates and solid net investment income. However, the positives were partially offset by higher costs.
Blue Owl Capital Corporation Price, Consensus and EPS Surprise
Net investment income surged 29.5% year over year to $190.1 million, surpassing our estimate by 7.8%.
Total new investment commitments amounted to $500.2 million across seven new portfolio companies and six existing ones, marking a robust increase of 17% year over year.
Blue Owl Capital concluded the third quarter with investments in 187 portfolio companies, boasting an aggregate fair value of $12.9 billion. As of Sep 30, 2023, the average investment size in each portfolio company stood at $69 million.
Total operating expenses rose 24.5% year over year to $206.2 million in the third quarter, marginally exceeding our estimate. The increase was primarily driven by higher interest expenses, performance-based incentive fees and other general and administrative expenses.
The company reported a net income of $206.9 million in the third quarter, declining from $265.4 million in the year-ago period.
Financial Update (as of Sep 30, 2023)
Blue Owl Capital ended the third quarter with cash and restricted cash of $432 million, which declined from $445.1 million as of Dec 31, 2022. Total assets were $13.5 billion, down from $13.6 billion at 2022-end.
The debt stood at $7.1 billion, a decrease from $7.3 billion at 2022-end. OBDC still had $1.4 billion of undrawn capacity under its credit facilities.
Net cash from operating activities in the first nine months of 2023 was robust at $721.8 million compared with the prior year’s figure of $122.5 million.
At the end of the third quarter, net debt to equity was 1.13X, a slight improvement from 1.18x at the end of September 2022.
Dividend & Repurchase Update
The board of directors at Blue Owl Capital hiked the fourth-quarter 2023 basic dividend by 2 cents to 35 cents per share, payable on Jan 12, next year, to shareholders of record as of Dec 29, 2023. A third-quarter 2023 supplemental dividend of 8 cents per share was declared for stockholders, bringing the total third-quarter dividend to 41 cents.
OBDC brought in a share buyback program of $150 million on Nov 1, 2022, with a life span of 18 months. As of Sep 30, 2023, $50 million of OBDC stock was purchased. The company did not make share repurchases under this program in the third quarter, leaving it with a remaining fund of $100 million.
Zacks Rank & Other Key Picks
Blue Owl Capital currently has a Zacks Rank #2 (Buy).
The consensus mark for Midwest Holding’s current year earnings is pegged at $3.85 per share, improving from a loss of 69 cents a year ago. Furthermore, the consensus estimate for MDWT’s revenues in 2023 suggests a 73.2% year-over-year growth.
The Zacks Consensus Estimate for MidCap Financial’s current year earnings indicates 13.4% growth from the prior-year period. It beat earnings estimates thrice in the past four quarters and missed once, with an average surprise of 5.9%. Also, the consensus mark for MFIC’s revenues in 2023 suggests 19.7% year-over-year growth.
The Zacks Consensus Estimate for Globe Life’s current year earnings is pegged at $10.59 per share, which indicates 29.9% year-over-year growth. It has witnessed six upward estimate revisions against none in the opposite direction in the past month. It beat earnings estimates in each of the past four quarters, with an average surprise of 2.3%.
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Blue Owl Capital (OBDC) Q3 Earnings Beat, Dividend Raised
Blue Owl Capital Corporation (OBDC - Free Report) reported third-quarter 2023 earnings per share of 49 cents, which beat the Zacks Consensus Estimate by 4.3%. The bottom line also improved 32.4% year over year.
The total investment income of OBDC amounted to $399 million, which increased 27.1% year over year. The top line beat the Zacks Consensus Estimate by 1.9%.
The strong third-quarter results of OBDC were supported by growth in the portfolio, high interest rates and solid net investment income. However, the positives were partially offset by higher costs.
Blue Owl Capital Corporation Price, Consensus and EPS Surprise
Blue Owl Capital Corporation price-consensus-eps-surprise-chart | Blue Owl Capital Corporation Quote
Q3 Update
Net investment income surged 29.5% year over year to $190.1 million, surpassing our estimate by 7.8%.
Total new investment commitments amounted to $500.2 million across seven new portfolio companies and six existing ones, marking a robust increase of 17% year over year.
Blue Owl Capital concluded the third quarter with investments in 187 portfolio companies, boasting an aggregate fair value of $12.9 billion. As of Sep 30, 2023, the average investment size in each portfolio company stood at $69 million.
Total operating expenses rose 24.5% year over year to $206.2 million in the third quarter, marginally exceeding our estimate. The increase was primarily driven by higher interest expenses, performance-based incentive fees and other general and administrative expenses.
The company reported a net income of $206.9 million in the third quarter, declining from $265.4 million in the year-ago period.
Financial Update (as of Sep 30, 2023)
Blue Owl Capital ended the third quarter with cash and restricted cash of $432 million, which declined from $445.1 million as of Dec 31, 2022. Total assets were $13.5 billion, down from $13.6 billion at 2022-end.
The debt stood at $7.1 billion, a decrease from $7.3 billion at 2022-end. OBDC still had $1.4 billion of undrawn capacity under its credit facilities.
Net cash from operating activities in the first nine months of 2023 was robust at $721.8 million compared with the prior year’s figure of $122.5 million.
At the end of the third quarter, net debt to equity was 1.13X, a slight improvement from 1.18x at the end of September 2022.
Dividend & Repurchase Update
The board of directors at Blue Owl Capital hiked the fourth-quarter 2023 basic dividend by 2 cents to 35 cents per share, payable on Jan 12, next year, to shareholders of record as of Dec 29, 2023. A third-quarter 2023 supplemental dividend of 8 cents per share was declared for stockholders, bringing the total third-quarter dividend to 41 cents.
OBDC brought in a share buyback program of $150 million on Nov 1, 2022, with a life span of 18 months. As of Sep 30, 2023, $50 million of OBDC stock was purchased. The company did not make share repurchases under this program in the third quarter, leaving it with a remaining fund of $100 million.
Zacks Rank & Other Key Picks
Blue Owl Capital currently has a Zacks Rank #2 (Buy).
Investors interested in the broader Finance space can consider other top-ranked companies like Midwest Holding Inc. , MidCap Financial Investment Corporation (MFIC - Free Report) , and Globe Life Inc. (GL - Free Report) , each carrying a Zacks Rank #2 at present. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
The consensus mark for Midwest Holding’s current year earnings is pegged at $3.85 per share, improving from a loss of 69 cents a year ago. Furthermore, the consensus estimate for MDWT’s revenues in 2023 suggests a 73.2% year-over-year growth.
The Zacks Consensus Estimate for MidCap Financial’s current year earnings indicates 13.4% growth from the prior-year period. It beat earnings estimates thrice in the past four quarters and missed once, with an average surprise of 5.9%. Also, the consensus mark for MFIC’s revenues in 2023 suggests 19.7% year-over-year growth.
The Zacks Consensus Estimate for Globe Life’s current year earnings is pegged at $10.59 per share, which indicates 29.9% year-over-year growth. It has witnessed six upward estimate revisions against none in the opposite direction in the past month. It beat earnings estimates in each of the past four quarters, with an average surprise of 2.3%.