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Owl Rock Capital's (ORCC) Q4 Earnings Beat Mark, Tumble Y/Y

Owl Rock Capital Corporation’s ORCC fourth-quarter 2020 earnings per share of 29 cents beat the Zacks Consensus Estimate by 3.6% on total investment income. However, the same decreased year over year by 21.6%.
This downside was mainly due to the COVID-led turmoil in the financial markets and higher expenses.

Quarter in Detail

In the quarter, the company’s total investment income was $221.3, up 9.4% year over year. This upside was on the back of an increase in the investment portfolio.

New investment commitments were $1.5 billion, up 47.9% year over year.
The company concluded the fourth quarter with investments in 119 portfolio companies with an aggregate fair value of $10.8 billion. As of Dec 31, 2020, the average investment size in each portfolio company was $91.1 million based on fair value.

Total operating expenses of $106.7 million rose 87.5% year over year due to higher gross management fees, incentive fees and professional fees, interest expenses, etc. Other factors are expiration of the management fee and incentive fee waivers.

Dividend Update

The company declared a fourth-quarter dividend of 31 cents per share and had previously cleared a special dividend of 8 cents for its stockholders of record as of Dec 31, 2020. The amount will be paid out on or before May 14, 2021.

Financial Update

As of Dec 31, 2020, the company’s interest expenses of $152.9 million increased 12.1% year over year.

As of Dec 31, 2020, the company had cash and restricted cash worth $347.9 million, an amount of $5.4 billion as total principal value of debt outstanding and $2.1 billion of liquidity.

As of Dec 31, 2020, the company had total assets worth $11.3 billion, up 22.8% from the level at 2019 end.

It ended the fourth quarter with $5.3 billion debt, up 74.2% from the level at last-year end.

Full-Year Update

Total investment income of $803.3 million rose 11.9% year over year on the back of an expanded investment portfolio.

For 2020, new investment commitments were down 22.3% year over year. For the full year, the amount of new investments was $2.8 billion across 30 new portfolio companies and 43 existing ones.

Zacks Rank & Peer Releases

Owl Rock Capital currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Of the other companies in the finance sector that already reported fourth-quarter earnings, the bottom-line results of Visa Inc. V, Synchrony Financial SYF and American Express Company AXP beat the respective Zacks Consensus Estimates.

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