Why Should You Hold Owl Rock Capital (ORCC) in Your Portfolio?
An impressive portfolio and a healthy revenue stream make Owl Rock Capital (ORCC) an attractive stock.
Owl Rock Capital Corporation ORCC is currently riding on its healthy revenue stream, strong credit performance and a solid portfolio. In fact, it ended the June quarter with investments in 129 portfolio companies with an aggregate fair value of $11.9 billion.
The company's $11.9 billion worth of assets make it one of the biggest business development companies and fortify its position in the market.
Despite the current situation, the company managed to deploy capital to attractive investments and drive an incremental yield in the portfolio. It continues to seek opportunities in stable, large and recession-resistant businesses.
The company has been witnessing strong investment income growth since its inception in 2015. In fact, its investment income saw a CAGR of 129.8% during the 2016-2020 forecast period, which is impressive.
In the first half of 2021, total investment income rose 19.1% year over year on the back of an expanded investment portfolio. A steady rise in revenues, primarily from the company’s rapidly-growing interest income and growth strategies, is likely to pave the way for long-term growth.
Its inorganic growth story also impresses. Owl Rock Capital Group and Owl Capital Partners announced their merger with Baltimore Acquisition Corp, a special purpose acquisition company.
Owl Rock Capital and Dyal Capital Partners completed their pending business combination to form Blue Owl Capital Inc.
On the back of its solvency level, it paid out six special dividends apart from the regular ones in the fourth quarter of 2020. Its dividend yield stands at 8.5%, much higher than its industry's average of 1.5%. This should instill investors’ confidence in the stock.
Zacks Rank and Price Performance
Shares of this presently Zacks Rank #3 (Hold) company have gained 18.3% in a year’s time, outperforming the industry's growth of 9%. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
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