Is It Worth Considering Blue Owl Capital Inc. (NYSE:OWL) For Its Upcoming Dividend?

By
Simply Wall St
Published
May 14, 2022
NYSE:OWL
Source: Shutterstock

It looks like Blue Owl Capital Inc. (NYSE:OWL) is about to go ex-dividend in the next 4 days. The ex-dividend date is one business day before a company's record date, which is the date on which the company determines which shareholders are entitled to receive a dividend. The ex-dividend date is an important date to be aware of as any purchase of the stock made on or after this date might mean a late settlement that doesn't show on the record date. In other words, investors can purchase Blue Owl Capital's shares before the 19th of May in order to be eligible for the dividend, which will be paid on the 27th of May.

The company's next dividend payment will be US$0.10 per share, and in the last 12 months, the company paid a total of US$0.40 per share. Last year's total dividend payments show that Blue Owl Capital has a trailing yield of 3.6% on the current share price of $11.13. Dividends are a major contributor to investment returns for long term holders, but only if the dividend continues to be paid. As a result, readers should always check whether Blue Owl Capital has been able to grow its dividends, or if the dividend might be cut.

Check out our latest analysis for Blue Owl Capital

Dividends are typically paid out of company income, so if a company pays out more than it earned, its dividend is usually at a higher risk of being cut. Blue Owl Capital reported a loss last year, so it's not great to see that it has continued paying a dividend.

Click here to see the company's payout ratio, plus analyst estimates of its future dividends.

historic-dividend
NYSE:OWL Historic Dividend May 14th 2022

Have Earnings And Dividends Been Growing?

Stocks in companies that generate sustainable earnings growth often make the best dividend prospects, as it is easier to lift the dividend when earnings are rising. If business enters a downturn and the dividend is cut, the company could see its value fall precipitously. Blue Owl Capital was unprofitable last year, although, we can see that at least its loss per share reduced by 61% on the previous year.

One year is a very short time frame in the pantheon of investing, so we wouldn't get too hung up on these numbers.

We'd also point out that Blue Owl Capital issued a meaningful number of new shares in the past year. It's hard to grow dividends per share when a company keeps creating new shares.

Given that Blue Owl Capital has only been paying a dividend for a year, there's not much of a past history to draw insight from.

We update our analysis on Blue Owl Capital every 24 hours, so you can always get the latest insights on its financial health, here.

Final Takeaway

From a dividend perspective, should investors buy or avoid Blue Owl Capital? It's hard to get used to Blue Owl Capital paying a dividend despite reporting a loss over the past year. It might be worth researching if the company is reinvesting in growth projects that could grow earnings and dividends in the future, but for now we're on the fence about its dividend prospects.

If you're not too concerned about Blue Owl Capital's ability to pay dividends, you should still be mindful of some of the other risks that this business faces. Be aware that Blue Owl Capital is showing 2 warning signs in our investment analysis, and 1 of those is a bit concerning...

A common investing mistake is buying the first interesting stock you see. Here you can find a full list of high-yield dividend stocks.

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