Is Blue Owl Capital Still a Buy After Its 2024 Decline and Recent Price Rebound?

Blue Owl Capital (OBDC) has long been a fixture in the business development company (BDC) space, leveraging its scale and diversification to navigate macroeconomic cycles. However, its 2024 performance-marked by a decline in net asset value (NAV) and mixed technical signals-has left investors questioning whether the stock's recent rebound justifies its risk profile. This analysis evaluates Blue Owl's valuation, leverage, dividend sustainability, and technical indicators to determine if it remains a compelling buy.

Financial Leverage and Dividend Sustainability: A Double-Edged Sword

Blue Owl's leverage metrics appear conservative compared to industry benchmarks. As of December 2024, the company maintained a net debt-to-equity ratio of 1.19x, significantly lower than the average 4.3x debt-to-EBITDA ratio for BDC portfolio companies according to Sure Dividend. This suggests a disciplined approach to capital structure, which could insulate the firm during economic downturns. However, the company's dividend policy raises red flags. While Blue Owl reported a net investment income of $0.47 per share in Q4 2024, its dividend payout ratio has historically exceeded 100%, with a trailing ratio of 114.18% as of December 2025 according to TipRanks. This means the company is distributing more in dividends than it earns, relying on portfolio gains or external financing to sustain payouts.

The dividend yield, currently around 11.34–11.65% according to TipRanks, is attractive but comes with risks. For context, the S&P 500's average yield is ~1.2% according to TipRanks, underscoring the premium investors pay for Blue Owl's income. Yet, the company's supplemental dividends-such as the $0.05 per share declared in Q4 2024-highlight a reliance on non-recurring income to maintain its yield. If economic conditions deteriorate or portfolio performance weakens, Blue Owl may face pressure to reduce or eliminate these supplemental payouts, eroding investor confidence.

Technical Analysis: A Mixed Bag of Signals

From a technical perspective, Blue Owl's stock has shown resilience but faces headwinds. As of Q3 2025, the RSI stood at 53.224, indicating a neutral stance, while the MACD line crossed above the signal line, signaling bullish momentum. However, the 50-day moving average ($19.1) trading below the 200-day moving average suggests a bearish trend, often termed a "death cross." This divergence between short-term and long-term indicators complicates the outlook.

Liquidity metrics also tell a nuanced story. Blue Owl's cash balance of $397.1 million as of September 2025 provides a buffer, but its NAV per share declined to $14.89 from $15.03 in Q2 2025, reflecting unrealized depreciation on portfolio investments. The stock's recent rebound in Q3 2025 has been tempered by a Zacks Rank #4 (Sell) rating according to PR Newswire, driven by downward revisions to earnings estimates. While the company's share repurchase program-allowing up to $200 million in buybacks over 18 months-signals management's confidence, it remains to be seen whether this will offset broader market skepticism.

Industry Benchmarks and Long-Term Growth Drivers

Blue Owl's leverage profile is favorable relative to peers, but the BDC sector as a whole is facing late-cycle challenges. KBRA's Q3 2025 report notes that while most BDCs maintained stable credit metrics, dispersion in performance widened, with some platforms struggling due to borrower underperformance. Blue Owl's focus on high-quality, senior secured debt- 74.4% of its portfolio as of September 2025-positions it better than less diversified competitors. Its weighted average yield of 11.1% according to Blue Owl's press release also outperforms the industry average, suggesting strong income generation potential.

Long-term growth hinges on Blue Owl's ability to capitalize on its strategic initiatives. The firm's expansion into digital infrastructure, alternative credit, and real estate debt according to its Q4 2024 results aligns with high-growth sectors in the private credit market. Additionally, its $1.3 billion in new investment commitments for Q3 2025 according to PR Newswire underscores its capacity to scale. However, these opportunities must be balanced against macroeconomic risks, including rising interest rates and potential defaults in its portfolio.

Conclusion: A High-Yield Gamble with Caveats

Blue Owl Capital's 11.4% dividend yield is undeniably appealing, particularly for income-focused investors. Its conservative leverage ratios and diversified portfolio provide a degree of downside protection. Yet, the company's payout ratio exceeding 100% and mixed technical signals-such as the bearish 200-day moving average-highlight significant risks. The recent share repurchase program and strategic forays into alternative credit could bolster long-term value, but these benefits may take time to materialize.

For investors willing to tolerate volatility, Blue Owl's high yield and growth-oriented strategy may justify the risks. However, those prioritizing stability should proceed cautiously, given the potential for dividend cuts or further NAV declines. Ultimately, Blue Owl remains a speculative bet, best suited for those who can stomach the inherent uncertainties of a leveraged BDC in a shifting economic landscape.