OBDC Q3 2023 Updates By Scott Kennedy

Introduction section by Colorado Wealth Management Fund.

Article section by Scott Kennedy.

Bringing More of Scott’s Work to Our Website

The REIT Forum is a service produced by Michael Vanloon (better known as Colorado Wealth Management Fund) and Scott Kennedy. After intense consideration, I decided to launch our service through Substack. Since then, we’ve seen great success. Substack enables us to give readers real-time alerts with entire articles delivered directly to their inboxes.

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Disclosures

Related to the stocks in this article:

CWMF is long: RITM-D, GPMT-A, DX-C, EFC-A, MFA-C, RITM-C, EFC-B, PMT-C, PMT-B, CIM-B, AGNCP, CIM-D, RITM, SLRC, MFA, GPMT, RC.

Scott Kennedy is long: RITM, RC, SLRC, GPMT, ARCC, TSLX, FSK, MFA, RITM-D, MITT-B, MITT-C, GAINL, RCB, ECCC, ECCW.

The rest of this post is from Scott Kennedy.

Summary

• This 24th earnings assessment article reviews OBDC’s NAV and NII performance during Q3 2023.

• This article also discusses how OBDC’s quarterly change in NAV and NII “matched up” to expectations. Earnings remain a key driver to stock performance.

• OBDC’s NAV matched my/our expectations while its NII was nearly an exact match-very minor outperformance.

• OBDC received a 3% recommendation range “upgrade”. No change in OBDC’s risk rating though (remains at a 3.5). OBDC is currently deemed appropriately valued (HOLD).

• OBDC reported another good quarter.  Along with no new non-accruals, I was pleased with the modest decrease to OBDC's PIK/deferred income percentage (though still is high/needs to be monitored).

Introduction:

Hi subscribers. For new members, my name is Scott Kennedy and currently I fully cover 20 mortgage real estate investment trust (mREIT) and 15 business development company (“BDC”) common stocks within this Investing Group regarding research/data, subscriber questions, weekly projected book values/net asset values (BV/NAV), and common stock recommendation ranges. Colorado (“CO”) Wealth Management handles the mREIT preferred stocks and he and his team handles all other applicable REIT sectors outside the mREIT sector. CO also provides some mREIT common stock and BDC articles from time-to-time which are more of an “overview/introduction” discussion; typically based either on my or our combined research/data. This also includes some macroeconomic trends and data. My name is always attached to all Investing Group articles I personally wrote so there is no confusion for subscribers.

This REIT Forum article is part of a series of articles over a span of 6-7 weeks which will analyze my previously projected BV/NAV and core earnings (or core earnings equivalent)/net investment income (“NII”) figures and compare these metrics to each mREIT’s and BDC’s actual reported results, respectively. For readers who are familiar with my public mREIT and/or BDC articles, these types of articles are beneficial to readers who desire to pursue a more active investing strategy and/or want more “real time” thoughts/analysis.

I hope my services/contributions ultimately help enhance a subscriber’s total investment returns or minimize their total investment losses within the mREIT and BDC sectors. At the very least, I hope subscribers will gain more insight into the mREIT and BDC sectors by reading my/our exclusive REIT Forum articles.

1) OBDC’s NAV and NII Q3 2023 Performance (Projected Versus Actual Results):

On 11/8/2023, Blue Owl Capital Corp. (OBDC) reported the company’s earnings results for the third quarter of 2023. Table 1 below provides OBDC’s NAV and earnings summary.

Table 1 – OBDC Q3 2023 NAV and Earnings Summary

Source: Taken Directly from the REIT Forum’s © Analytical Spreadsheets/Data

Hi subscribers. I was able to review OBDC’s Q3 2023 earnings results in more depth. OBDC's Q3 2023 NII of $0.488 per share was nearly an exact match - very minor outperformance versus my projection of $0.480 per share (range $0.455 - $0.505 per share). OBDC’s NII was $0.479 per share for the second quarter of 2023. As such, I projected a NII increase of $0.001 per share. In actuality, OBDC reported an increase of $0.009 per share during the third quarter of 2023. The institutional analysts’ consensus average was NII of $0.471 per share. Let us discuss how OBDC very slightly outperformed my quarterly NII expectations.