Core Viewpoint - Blue Owl Capital Corporation is expected to report its first-quarter 2025 results on May 7, 2025, with earnings estimated at 43 cents per share and revenues at $452.9 million, indicating a year-over-year earnings decline of 8.5% but a revenue growth of 13.3% [1] Financial Performance Estimates - The Zacks Consensus Estimate for Blue Owl Capital's revenues for 2025 is $1.9 billion, reflecting a year-over-year increase of 17.1% [2] - The consensus estimate for the current year's EPS is $1.70, suggesting a decline of approximately 10.5% year-over-year [2] - The company has beaten the consensus estimate in one of the last four quarters, met once, and missed twice, with an average surprise of negative 0.5% [2] Earnings Prediction - The model predicts a likely earnings beat for Blue Owl Capital, supported by a positive Earnings ESP of +2.33% and a Zacks Rank of 3 (Hold) [3] Q1 Results Influencers - The estimated net investment income for Q1 indicates a 9.5% year-over-year decline, with expected elevated net operating expenses around $250 million due to higher interest expenses and management fees [5] - Dividend income is anticipated to increase, with the Zacks Consensus Estimate for controlled affiliated dividend income showing a 1.5% year-over-year rise, while the model predicts a 2.9% growth [6][7] - Non-controlled non-affiliated interest income is expected to grow by 4.9% year-over-year according to the Zacks Consensus Estimate, with the model estimating a 3.8% increase [7] Investment Portfolio Insights - Blue Owl Capital's investment portfolio is projected to grow, driven by strong demand for financing solutions, with both the Zacks Consensus Estimate and model estimates indicating a 1.8% increase in controlled affiliated interest income compared to the same quarter last year [8] - The Zacks Consensus Estimate for payment-in-kind interest income from non-controlled, non-affiliated investments suggests a significant year-over-year growth of 15.7%, which may help offset some negatives [9] - The expected supplemental dividend per share is projected to be 3 cents [9]

Core Insights - The article emphasizes the importance of a diversified investment strategy that combines classic dividend growth stocks with other asset classes such as Business Development Companies, REITs, and Closed End Funds to enhance income while achieving total returns comparable to traditional index funds [1]. Investment Strategy - The author advocates for a hybrid investment approach that balances growth and income, suggesting that this method can effectively boost investment income while maintaining a total return aligned with the S&P 500 [1]. Personal Experience - The author shares personal investment experiences, highlighting a journey from traditional index fund investing to a more nuanced strategy that includes high-quality dividend stocks and other income-generating assets [1].

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Group 1 - The primary goal of the Cash Flow Kingdom Income Portfolio is to achieve an overall yield in the range of 7% to 10% by combining various income streams to create a steady portfolio payout [1] - Blue Owl Capital Corporation (OBDC) is identified as a solid Business Development Company that has experienced a decline in its share price due to a broader market downturn, resulting in an increased dividend yield [1] - The Cash Flow Club, which includes contributions from analysts focusing on company cash flows and capital access, offers features such as a personal income portfolio targeting over 6% yield and coverage of various sectors including energy midstream and commercial mREITs [1]

Core Viewpoint - Blue Owl Capital Corporation (OBDC) will release its financial results for the first quarter ended March 31, 2025, on May 7, 2025, after market close, followed by a conference call on May 8, 2025, at 10:00 a.m. Eastern Time to discuss these results [1]. Company Information - Blue Owl Capital Corporation is a specialty finance company focused on lending to U.S. middle-market companies and is regulated as a business development company under the Investment Company Act of 1940 [3]. - OBDC is externally managed by Blue Owl Credit Advisors LLC, which is an SEC-registered investment adviser and an indirect affiliate of Blue Owl Capital Inc. [3].

Company Overview - Skylight has secured a $50 million loan through an expanded partnership with SG Credit Partners and Wingspire Capital, supporting its mission to meet the growing demand for its technology for families [1][4] - The company has achieved 99% year-over-year revenue growth, indicating strong market performance and demand for its products [1] Financial Details - The financing will fund inventory purchases, enabling Skylight to scale with consumer demand while continuing to innovate [3] - SG Credit Partners increased its commitment from a previous $20 million facility to $50 million, highlighting confidence in Skylight's growth trajectory [4] Product and Market Position - Skylight connects over 9.3 million users and focuses on simplifying household management through innovative products like the Skylight Calendar and Skylight Frame [6][7] - The company is addressing the mental load of household management, which consumes over 30 hours weekly, by developing solutions that help families stay connected [3] Strategic Partnerships - The partnership with Wingspire Capital is aimed at providing additional liquidity to support Skylight's strategic growth plans [5] - Both SG Credit Partners and Wingspire Capital have a track record of backing innovative consumer brands, reinforcing Skylight's position in the market [4][5]

Financial Data and Key Metrics Changes - The fourth quarter net investment income (NII) was $0.47 per share, with a full year NII totaling $1.89 per share [9][36] - Return on equity (ROE) for the quarter was 12.4%, marking the eighth consecutive quarter of double-digit ROE, while the full year ROE was 12.2% [10] - The net asset value (NAV) per share at quarter-end was $15.26, approximately in line with the prior quarter [10][36] - Record dividends paid out in 2024 totaled $1.72 per share, reflecting a nearly 10% increase year over year [11] Business Line Data and Key Metrics Changes - The company originated a record number of investments in 2024, committing over $27 billion in direct originations, which was roughly double from 2023 [23] - In the fourth quarter, approximately $1.2 billion in new investment commitments were deployed, with over 97% consisting of first lien investments [24] - First lien investments increased from 68% to 76% of the portfolio, and combined with OBDE's portfolio, increased to 78% pro forma [25] Market Data and Key Metrics Changes - The non-accrual rate remained low at 40 basis points of the portfolio at fair value, decreasing to 30 basis points when combined with OBDE's portfolio [31] - The average loan-to-value (LTV) ratio of the portfolio was 44%, with a median EBITDA of portfolio borrowers at $119 million [26] Company Strategy and Development Direction - The merger with OBDE has positioned the company as the second-largest publicly traded BDC by total assets, enhancing competitive advantages and trading liquidity [20][21] - The company aims to optimize its portfolio and asset mix to improve yield, potentially increasing investments in strategic equity and joint ventures [49] - The strategic focus includes expanding into alternative and investment-grade credit as well as data centers, broadening the credit platform [15][64] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the resilience of the portfolio despite economic pressures, with borrower revenues and EBITDA continuing to grow in the mid to high single digits year over year [27][34] - The company anticipates supportive market conditions in 2025, which may drive a potential pickup in M&A activity [46] - Management noted that while headwinds from lower rates and spreads are expected, the scale and presence of the credit platform will allow continued attractive returns [58][59] Other Important Information - The company has established a joint venture across all BDCs to create a more efficient investment structure [43] - Following the merger, the company plans to file a $750 million market equity issuance program to raise capital under supportive market conditions [42] Q&A Session Summary Question: What can Blue Owl Capital Corporation deliver in terms of ROEs in 2025 and beyond? - Management indicated that ROE could be in the range of 10% to 11% due to lower rates and spreads, but expects to offset some of this reduction through cost savings and portfolio optimization from the merger [56][58] Question: How far along is the portfolio in recognizing Fed rate cuts? - The portfolio is approximately 70% through recognizing the resets from the Fed rate cuts [71] Question: What proportion of the portfolio is still above market spreads? - About 10% to 15% of the portfolio could still be at risk of opportunistic refinancing with lower spreads [84] Question: Can you elaborate on the strategic equity investments? - Strategic equity investments are in specialized lending strategies, and while there are no immediate plans for new investments, the company remains open to opportunities that align with its high standards [92] Question: How does the company plan to utilize the ATM program? - The ATM program will be used to issue equity above book value, ensuring it is accretive and beneficial for shareholders [126][130]

Core Viewpoint - Blue Owl Capital Corporation reported mixed financial results for the fourth quarter of 2024, with earnings per share meeting estimates but showing a decline year-over-year, alongside a slight decrease in total investment income [1][3]. Financial Performance - The fourth-quarter earnings per share (EPS) was 47 cents, matching the Zacks Consensus Estimate but down from 51 cents a year ago [1]. - Total investment income for the fourth quarter was $394.39 million, a decrease of 4.1% year-over-year, and it missed the Zacks Consensus Estimate by 0.3% [1][2]. - Net investment income fell 7.4% year-over-year to $184.2 million, although it exceeded the estimate of $180.7 million [4]. - Full-year total investment income for 2024 was $1.6 billion, reflecting a 0.9% increase year-over-year, while full-year EPS was $1.89, down 2.1% from the previous year [3]. Expenses and Income - Total expenses for the fourth quarter increased by 0.8% year-over-year to $209.7 million, primarily due to higher interest expenses and management fees, but were lower than the estimate of $210.7 million [5]. - The company recorded a net income of $154.9 million in the fourth quarter, compared to $189 million a year ago [5]. Investment Commitments - New investment commitments for 2024 totaled $7.3 billion across 93 new portfolio companies and 68 existing ones [3]. - In the fourth quarter, total new investment commitments were $1.7 billion across 27 new portfolio companies and 17 existing ones [4]. Balance Sheet and Cash Flow - As of December 31, 2024, Blue Owl Capital had a cash balance of $505.7 million, down from $658.7 million at the end of 2023 [6]. - Total assets increased to $13.87 billion from $13.51 billion at the end of 2023, while debt rose to $7.46 billion from $7.08 billion [6]. - Net operating cash flow in 2024 was $160.2 million, significantly down from $1.14 billion in the prior year [7]. Dividend and Share Repurchase - The board declared a first-quarter 2025 dividend of 37 cents per share, payable on or before April 15, 2025, and a supplemental dividend of 5 cents per share for the fourth quarter of 2024 [8]. - The company has a stock repurchase program allowing for the purchase of up to $150 million in shares, but no repurchases were made in 2024 [9].

Financial Data and Key Metrics Changes - The fourth quarter net investment income (NII) was $0.47 per share, with a full year NII totaling $1.89 per share [6][24] - The return on equity (ROE) for the quarter was 12.4%, marking the eighth consecutive quarter of double-digit ROE, while the full year ROE was 12.2% [7] - The net asset value (NAV) per share at quarter end was $15.26, approximately in line with the prior quarter [7][24] - Record dividends paid out in 2024 totaled $1.72 per share, reflecting a nearly 10% year-over-year increase [8] Business Line Data and Key Metrics Changes - In 2024, the company originated a record $27 billion in direct investments, doubling from 2023 [16] - In the fourth quarter, approximately $1.2 billion in new investment commitments were deployed, with over 97% consisting of first lien investments [17][18] - First lien investments increased from 68% to 76% of the portfolio, and combined with OBDE's portfolio, first lien investments rose to 78% [18] Market Data and Key Metrics Changes - The average hold size on new direct lending deals grew from $200 million in 2021 to roughly $350 million in 2024, while total deal sizes nearly doubled from $600 million to over $1 billion [13] - The non-accrual rate remained low at 40 basis points of the portfolio at fair value, decreasing to 30 basis points when combined with OBDE's portfolio [21] Company Strategy and Development Direction - The merger with OBDE positioned the company as the second largest publicly traded BDC by total assets, enhancing trading liquidity and operational synergies [14] - The company aims to optimize its portfolio and asset mix for improved yield, potentially increasing investments in strategic equity and joint ventures [33] - The strategic focus includes expanding into alternative and investment-grade credit, as well as data centers, to augment the origination funnel [11] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the resilience of the portfolio despite economic pressures, noting solid underlying financial performance from borrowers [20][78] - The expectation for 2025 includes potential synergies from the merger and a focus on optimizing the combined portfolio for better returns [31][33] - Management indicated that while headwinds from lower rates and spreads may persist, the company is well-positioned to capitalize on opportunities regardless of M&A activity [31] Other Important Information - The company reported total portfolio investments exceeding $17 billion and total net assets nearing $8 billion following the merger [24] - The company established a joint venture across all BDCs to create a more efficient investment structure [29] Q&A Session Summary Question: What can OBDC deliver in terms of ROEs in 2025 and beyond? - Management indicated that ROE could be in the low 10s due to headwinds from lower rates and spreads, but potential synergies from the merger could add 50 to 75 basis points to ROE [36][39][40] Question: Where is the portfolio in terms of recognizing Fed rate cuts? - The portfolio is about 70% through recognizing the resets from Fed rate cuts [54] Question: What proportion of the portfolio is still above legacy assets with higher spreads? - Approximately 10% to 15% of the portfolio could still be at risk of opportunistic refinancing at lower spreads [63][64] Question: Will there be significant new portfolio company creations in 2025? - No immediate plans for new portfolio company creations, but the company remains open to opportunities that align with its investment strategy [69] Question: How is the ATM program expected to be utilized? - The ATM program will be used to issue above book value, ensuring it is accretive and not dilutive [99] Question: What was the nature of the multi-billion dollar deals closed during the quarter? - The deals included public-to-private transactions and were new borrowers, not refinancings [100][101]

Blue Owl Capital Corporation (NYSE: OBDC) February 2025 Blue Owl Capital Corporation (NYSE: OBDC) Second largest publicly traded business development company (BDC) by market capitalization Investment Approach Managed by Blue Owl OBDC Highlights | PORTFOLIO | $17.4 billion across 236 portfolio | | --- | --- | | | companies | | ASSET MIX | 83% senior secured | | | 78% first lien investments | | | 96% floating rate debt investments1 | | DEBT PORTFOLIO | 11.1%1,3 | | YIELD | | | LEVERAGE | 1.20x net debt-to-equ ...