Oaktree Specialty Lending

OCSL

Market cap $1.22B

Oaktree Specialty Lending has historically generated mediocre annualized returns for buy-and-hold investors. Rising defaults and write-offs raise concerns over further dividend cuts. Structural shortcomings prevent the company from building a loan-loss reserve, translating to practically an inevitable decline in NAV.

Blackstone Secured Lending and Oaktree Specialty Lending have pulled back sharply. I compare them side by side. I share why I prefer BXSL over OCSL, and what it would take for me to buy them.

Oaktree Specialty Lending trades at a compelling discount, which, in light of the relatively positive earnings report, might create an interesting buying opportunity. Yet, while the discount looks attractive, compared to its closest peers, OCSL is actually similarly priced. Also, the dividend coverage remains tight, even after the recent cut.

Oaktree Specialty Lending Corporation ( OCSL ) Q4 2025 Earnings Call November 18, 2025 11:00 AM EST Company Participants Clark Koury Mathew Pendo - President Armen Panossian - CEO & Co-Chief Investment Officer Raghav Khanna - Co-Chief Investment Officer Christopher McKown - MD,CFO & Treasurer Conference Call Participants Melissa Wedel - JPMorgan Chase & Co, Research Division Sean-Paul Adams - B. Riley Securities, Inc., Research Division Presentation Operator Welcome, and thank you for joining Oaktree Specialty Lending Corporation's First Fiscal Quarter and Full Year 2025 Conference Call.

Oaktree Specialty Lending (OCSL) came out with quarterly earnings of $0.4 per share, beating the Zacks Consensus Estimate of $0.38 per share. This compares to earnings of $0.55 per share a year ago.

LOS ANGELES--(BUSINESS WIRE)--Oaktree Specialty Lending Corporation (NASDAQ:OCSL) (“Oaktree Specialty Lending” or the “Company”), a specialty finance company, today announced its financial results for the fiscal quarter and year ended September 30, 2025. Financial Highlights for the Quarter and Year Ended September 30, 2025 Total investment income was $77.3 million ($0.88 per share) and $316.8 million ($3.68 per share) for the fourth fiscal quarter of 2025 and full year, as compared with $75.3.

During times of turbulence and uncertainty in the markets, many investors turn to dividend-yielding stocks. These are often companies that have high free cash flows and reward shareholders with a high dividend payout.

The article highlights four major risks facing the private credit market - the four horsemen of the BDC Apocalypse. This includes lending to non-prime borrowers and receivables financing. AI-driven disruption in software companies and growing competition in private credit. So far these risks have not materialized in actual BDC results; however, they are worth considering when allocating to the sector. We remain bullish on BDCs overall.

Dividends matter. So do losses. Look at a couple of charts and call it a day. Most people don't want to go through all the history, but we can sum up over a decade in a few images. When we compare prices and book value over time, we can see that the huge dividends were not enough. They still are not enough.

The BDC sector has been hammered—but opportunity may finally be knocking. Two high-yield giants now trade at big discounts to NAV. I compare them side by side and share the scenarios in which I think each makes sense to buy.