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Why Is Blue Owl Capital Corporation (OBDC) Up 1.5% Since Last Earnings Report?
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It has been about a month since the last earnings report for Blue Owl Capital Corporation (OBDC - Free Report) . Shares have added about 1.5% in that time frame, underperforming the S&P 500.
Will the recent positive trend continue leading up to its next earnings release, or is Blue Owl Capital Corporation due for a pullback? 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.
Blue Owl Capital Q4 Earnings Top Estimates, Dividend Up
Blue Owl Capital reported fourth-quarter 2023 earnings per share (EPS) of 51 cents, which beat the Zacks Consensus Estimate by 6.3%. The bottom line also improved 24.4% year over year.
The total investment income of Blue Owl Capital amounted to $411.2 million, which increased 17.3% year over year. The top line beat the Zacks Consensus Estimate by 3.5%.
Strong fourth-quarter results of Blue Owl Capital were supported by growth in the portfolio, improved interest rates and record net investment income. However, the positives were partially offset by increased costs.
Q4 Update
Net investment income increased 22.5% year over year to $199 million. The metric beat our estimate by 5.3%.
Total new investment commitments (net of sell downs) were $1.3 billion across 17 new portfolio companies and 14 existing ones. The metric rose more than five-fold year over year in the quarter under review.
Blue Owl Capital ended the fourth quarter with investments in 193 portfolio companies, backed with an aggregate fair value of $12.7 billion. Based on the fair value, the average investment size in each portfolio company was $65.9 million as of Dec 31, 2023.
Total expenses escalated 11.7% year over year to $207.9 million in the fourth quarter. The metric was 3.5% higher than our estimate, primarily due to higher interest expenses, performance-based incentive fees, management fees and other general and administrative expenses.
The company recorded a net income of $189 million in the fourth quarter compared with $191.9 million in the year-ago period.
Full-Year Update
Total investment income of $1.6 billion increased 31.6% year over year in 2023.
Net investment income of $1.93 per share improved 36.9% year over year in 2023.
Financial Update (as of Dec 31, 2023)
Blue Owl Capital exited the fourth quarter with cash and restricted cash of $659.7 million, which improved from $445.1 million as of Dec 31, 2022. Total assets of $13.5 billion fell from $13.6 billion at 2022-end.
Debt was $7.1 billion, down from $7.3 billion at 2022-end. Blue Owl Capital had $1.4 billion of undrawn capacity under its credit facilities.
Net cash from operating activities in 2023 was $1.1 billion compared with the prior-year figure of $217.3 million.
At the fourth-quarter end, net debt to equity was 1.09X compared with 1.19x at 2022-end.
Dividend & Repurchase Update
The board of directors at Blue Owl Capital declared a first-quarter 2024 dividend of 37 cents per share, an increase of 2 cents, to be paid on or before Apr 15, 2024, to shareholders of record as of Mar 29. It also provided a fourth-quarter 2023 supplemental dividend of 8 cents per share.
Blue Owl Capital brought in a share buyback program of $150 million on Nov 1, 2022, with a life span of 18 months. As of Dec 31, 2023, $50 million of Blue Owl Capital stock was purchased. The company did not make share repurchases under this program in the fourth quarter, leaving it with a remaining fund of $100 million.
How Have Estimates Been Moving Since Then?
In the past month, investors have witnessed an upward trend in estimates revision.
VGM Scores
Currently, Blue Owl Capital Corporation has a nice Growth Score of B, a grade with the same score on the momentum front. Following the exact same course, the stock was allocated a grade of B on the value side, putting it in the top 40% for this investment strategy.
Overall, the stock has an aggregate VGM Score of B. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been broadly trending upward for the stock, and the magnitude of these revisions has been net zero. Notably, Blue Owl Capital Corporation has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.
Performance of an Industry Player
Blue Owl Capital Corporation is part of the Zacks Financial - Miscellaneous Services industry. Over the past month, Moody's (MCO - Free Report) , a stock from the same industry, has gained 3.6%. The company reported its results for the quarter ended December 2023 more than a month ago.
Moody's reported revenues of $1.48 billion in the last reported quarter, representing a year-over-year change of +14.7%. EPS of $2.19 for the same period compares with $1.60 a year ago.
Moody's is expected to post earnings of $2.81 per share for the current quarter, representing a year-over-year change of -6%. Over the last 30 days, the Zacks Consensus Estimate remained unchanged.
Moody's has a Zacks Rank #4 (Sell) based on the overall direction and magnitude of estimate revisions. Additionally, the stock has a VGM Score of F.
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Why Is Blue Owl Capital Corporation (OBDC) Up 1.5% Since Last Earnings Report?
It has been about a month since the last earnings report for Blue Owl Capital Corporation (OBDC - Free Report) . Shares have added about 1.5% in that time frame, underperforming the S&P 500.
Will the recent positive trend continue leading up to its next earnings release, or is Blue Owl Capital Corporation due for a pullback? 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.
Blue Owl Capital Q4 Earnings Top Estimates, Dividend Up
Blue Owl Capital reported fourth-quarter 2023 earnings per share (EPS) of 51 cents, which beat the Zacks Consensus Estimate by 6.3%. The bottom line also improved 24.4% year over year.
The total investment income of Blue Owl Capital amounted to $411.2 million, which increased 17.3% year over year. The top line beat the Zacks Consensus Estimate by 3.5%.
Strong fourth-quarter results of Blue Owl Capital were supported by growth in the portfolio, improved interest rates and record net investment income. However, the positives were partially offset by increased costs.
Q4 Update
Net investment income increased 22.5% year over year to $199 million. The metric beat our estimate by 5.3%.
Total new investment commitments (net of sell downs) were $1.3 billion across 17 new portfolio companies and 14 existing ones. The metric rose more than five-fold year over year in the quarter under review.
Blue Owl Capital ended the fourth quarter with investments in 193 portfolio companies, backed with an aggregate fair value of $12.7 billion. Based on the fair value, the average investment size in each portfolio company was $65.9 million as of Dec 31, 2023.
Total expenses escalated 11.7% year over year to $207.9 million in the fourth quarter. The metric was 3.5% higher than our estimate, primarily due to higher interest expenses, performance-based incentive fees, management fees and other general and administrative expenses.
The company recorded a net income of $189 million in the fourth quarter compared with $191.9 million in the year-ago period.
Full-Year Update
Total investment income of $1.6 billion increased 31.6% year over year in 2023.
Net investment income of $1.93 per share improved 36.9% year over year in 2023.
Financial Update (as of Dec 31, 2023)
Blue Owl Capital exited the fourth quarter with cash and restricted cash of $659.7 million, which improved from $445.1 million as of Dec 31, 2022. Total assets of $13.5 billion fell from $13.6 billion at 2022-end.
Debt was $7.1 billion, down from $7.3 billion at 2022-end. Blue Owl Capital had $1.4 billion of undrawn capacity under its credit facilities.
Net cash from operating activities in 2023 was $1.1 billion compared with the prior-year figure of $217.3 million.
At the fourth-quarter end, net debt to equity was 1.09X compared with 1.19x at 2022-end.
Dividend & Repurchase Update
The board of directors at Blue Owl Capital declared a first-quarter 2024 dividend of 37 cents per share, an increase of 2 cents, to be paid on or before Apr 15, 2024, to shareholders of record as of Mar 29. It also provided a fourth-quarter 2023 supplemental dividend of 8 cents per share.
Blue Owl Capital brought in a share buyback program of $150 million on Nov 1, 2022, with a life span of 18 months. As of Dec 31, 2023, $50 million of Blue Owl Capital stock was purchased. The company did not make share repurchases under this program in the fourth quarter, leaving it with a remaining fund of $100 million.
How Have Estimates Been Moving Since Then?
In the past month, investors have witnessed an upward trend in estimates revision.
VGM Scores
Currently, Blue Owl Capital Corporation has a nice Growth Score of B, a grade with the same score on the momentum front. Following the exact same course, the stock was allocated a grade of B on the value side, putting it in the top 40% for this investment strategy.
Overall, the stock has an aggregate VGM Score of B. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been broadly trending upward for the stock, and the magnitude of these revisions has been net zero. Notably, Blue Owl Capital Corporation has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.
Performance of an Industry Player
Blue Owl Capital Corporation is part of the Zacks Financial - Miscellaneous Services industry. Over the past month, Moody's (MCO - Free Report) , a stock from the same industry, has gained 3.6%. The company reported its results for the quarter ended December 2023 more than a month ago.
Moody's reported revenues of $1.48 billion in the last reported quarter, representing a year-over-year change of +14.7%. EPS of $2.19 for the same period compares with $1.60 a year ago.
Moody's is expected to post earnings of $2.81 per share for the current quarter, representing a year-over-year change of -6%. Over the last 30 days, the Zacks Consensus Estimate remained unchanged.
Moody's has a Zacks Rank #4 (Sell) based on the overall direction and magnitude of estimate revisions. Additionally, the stock has a VGM Score of F.