Owl Rock Capital (ORCC) Jumps 5.7% Since Q2 Earnings Beat
Owl Rock Capital Corporation’s ORCC shares have risen 5.7% since it reported strong second-quarter results on Aug 3. The results were supported by growth in the portfolio, dividend income and incremental fee income. The positives were partially offset by higher costs.
Owl Rock Capital reported second-quarter 2022 earnings per share of 32 cents, which beat the Zacks Consensus Estimate by a penny. The bottom line also improved from 30 cents a year ago.
The total investment income of ORCC amounted to $273.3 million, which climbed from $249 million a year ago. Also, the figure beat the consensus mark by 2.9%.
Owl Rock Capital Corporation Price, Consensus and EPS Surprise
Owl Rock Capital Corporation price-consensus-eps-surprise-chart | Owl Rock Capital Corporation Quote
Q2 Update
Net investment income rose to $125.1 million from $119.1 million a year ago.
New investment commitments were $603.4 million across 16 new portfolio companies and existing 10 portfolio companies. The metric plunged 61.8% year over year in the quarter under review.
Owl Rock Capital ended the second quarter with investments in 168 portfolio companies, backed with an aggregate fair value of $12.6 billion. Based on the fair value, the average investment size in each portfolio company was $75.3 million as of Jun 30, 2022.
Total expenses escalated nearly 13% year over year to $146.6 million in the second quarter.
It recorded a net loss of $34.9 million in the second quarter against a net income of $150.2 million in the prior-year quarter.
Financial Update (as of Jun 30, 2022)
Owl Rock Capital exited the second quarter with cash and restricted cash of $343.3 million, which declined from $447.1 million as of Dec 31, 2021. Total assets of $13.1 billion slipped from $13.3 billion at 2021-end.
Debt was at $7.1 billion, in line with 2021-end. ORCC had $1.4 billion of undrawn capacity under its credit facilities. It currently has no debt maturities until April 2024.
Net cash used in operating activities during the first half was $74.7 million compared with the prior-year quarter’s cash usage of $574.4 million.
At the quarter-end, debt to equity was at 1.20X.
Dividend Update
The board of directors at Owl Rock Capital approved a third-quarter dividend of 31 cents per share. The dividend will be paid out on or before Nov 15, 2022, to shareholders of record as of Sep 30, 2022.
Outlook
As most of Owl Rock Capital’s assets are floating in nature, an improving interest rate environment is projected to drive net investment income in the second half of 2022. The volatile market conditions are also expected to provide ORCC with direct lending opportunities.
Zacks Rank & Other Key Picks
Owl Rock Capital currently has a Zacks Rank #2 (Buy). Some other top-ranked stocks in the broader finance space are FlexShopper, Inc. FPAY, SmartFinancial, Inc. SMBK and Paramount Group, Inc. PGRE, each carrying a Zacks Rank #2 at present. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Headquartered in Boca Raton, FL, FlexShopper is a financial technology provider with a vast e-commerce presence. The Zacks Consensus Estimate for FPAY’s September-quarter bottom line indicates 140% year-over-year growth.
Based in Knoxville, TN, SmartFinancial is a leading financial services provider for individuals and corporate clients. The Zacks Consensus Estimate for SMBK’s 2022 earnings indicates 18% year-over-year growth.
New York-based Paramount Group works as a fully-integrated real estate investment trust. The Zacks Consensus Estimate for PGRE’s 2022 bottom line indicates 4.4% year-over-year growth.
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