Blue Owl Capital

OBDC

Market cap $5.51B

It is rare to be able to buy double-digit yields that are sustainable. However, every once in a while, overblown concerns in the market and media create a golden buy-the-dip opportunity in high-yielding stocks. I detail two very attractive buy-the-dip opportunities yielding 11-14%.

The VanEck BDC Income ETF (NYSEARCA:BIZD) just delivered a jolt to income investors: its July distribution came in at $0.24 per share, roughly half the $0.48 paid in April.

Business Development Companies face mounting risks as exhausted capital structures and poor dividend coverage threaten payout sustainability. Dividend cuts have become prevalent, with market reactions punishing BDCs regardless of existing discounts to NAV. I prioritize BDCs with well-covered, stable dividends over higher-yielding but riskier peers, favoring income stability and NAV protection.

Massive dividend yields are a huge draw for investors – both because everyone likes income

Externally managed BDCs have to meet a high bar to qualify for a durable income portfolio. Their fees and sub-optimal incentives provide a structural headwind for long-term compounding. In my portfolio, I hold 2 externally managed BDCs that have passed the test.

Business Development Companies (BDCs), such as BIZD, offer high yields but carry elevated risk due to their lending to less stable small and medium businesses. Rising economic uncertainty and recent inflation spikes have increased the risk profile for BDCs, making their borrowers more vulnerable. Many BDCs have underperformed recently, resulting in even higher dividend yields and steep discounts, but these may not offset the underlying risks.

NEW YORK, July 1, 2026 /PRNewswire/ -- Blue Owl Capital Corporation (NYSE: OBDC) ("OBDC") today announced it will release its financial results for the second quarter ended June 30, 2026 on Wednesday, August 5, 2026 after market close. OBDC invites all interested persons to its webcast / conference call on Thursday, August 6, 2026 at 10:00 a.m.

Two of the most defensively positioned, highest-yielding opportunities in years are hiding in plain sight. One combines a 7%+ yield with strong long-term growth potential and is backed by powerful macro tailwinds. The other yields 12%, trades at a deep discount, has a solid business model and balance sheet, and is buying back stock aggressively.

OBDC's vast private-credit portfolio, new asset sales and share buybacks support growth, but lower rates and elevated leverage remain key challenges.

April net investment activity reached a multi-year low as rising stock valuations and BDC sector weakness prompted a cautious approach and selective BDC purchases. Focused April allocations on Ares Capital, Blue Owl Capital, and Hercules Capital, yielding a 7.5% average on new investments despite sector headwinds. Dividend income set a modest April record at $990, up 3% year-over-year, with BDCs contributing 27% of Q2 year-to-date dividends but facing potential further cuts.