Blue Owl Capital trades 21% below NAV amid dividend concerns and portfolio challenges

Blue Owl Capital Corporation (OBDC) is currently trading at a 21% discount to its net asset value (NAV), providing a safety margin for income investors despite recent issues with dividend coverage. In Q1 2026, OBDC's net investment income per share dropped 22% year-over-year, covering only 86.5% of its dividend, which raises concerns about medium-term dividend stability. However, the quality of its portfolio improved with non-accrual loans at just 1.0% of fair value, although the overall portfolio size declined due to weaker loan originations and higher repayments. Market skepticism stemming from a failed merger and risks related to AI and SaaS sectors have pressured OBDC’s valuation, but there is potential for revaluation if market sentiment improves.