OCSL Stock Recent News

Oaktree Specialty Lending Corp. reported a solid quarter with a 3.2% total NAV return and a flat adjusted net income. Non-accruals fell due to a couple of favorable resolutions; however, it was another quarter of net realized losses. The company's valuation is fairly-valued at the moment and we would look to add the stock at a discount of 3-5% to the sector average valuation.

Ares Capital Corp. and Sixth Street Specialty Lending Inc. held onto the highest debt ratings among the 21 business development companies covered by Fitch Ratings, amid expectations that the sector will face economic headwinds in 2024, but with no major impact to their balance sheets.

Oaktree Specialty Lending Corporation has an 86% Senior Secured Lending focus. The company had an 89% dividend pay-out ratio in the last quarter, suggesting the dividend is well-covered. While the stock is not selling at a discount to NAV, it remains a solid hold for passive income investors.

Business Development Companies are an important part of the U.S. financial system, providing loans to private companies and offering high yields to investors. TriplePoint Venture Growth is a small BDC with a focus on venture lending, offering high yields but with higher risks due to problematic loans. Hercules Capital is a unique and well-performing BDC with exceptional underwriting and a strong track record, making it a good investment option.

Oaktree Specialty Corporation could benefit from lower funding rates in the coming quarters. The fund's emphasis on secular industries will likely sustain investment premiums, lending an opportunity for arbitrage if funding rates taper. Higher cash-based yields have occurred in recent quarters. Moreover, we believe lower nominal yields will mark up Oaktree's asset base, in turn realigning its NAVPS.

11:00 a.m. Eastern Time / 8:00 a.m. Pacific Time         LOS ANGELES, CA, Oct. 05, 2023 (GLOBE NEWSWIRE) -- Oaktree Specialty Lending Corporation (NASDAQ:OCSL) (“Oaktree Specialty Lending” or the “Company”) today announced that it will report its financial results for the fourth fiscal quarter and full year ended September 30, 2023 before the opening of the Nasdaq Global Select Market on Tuesday, November 14, 2023.

We recently topped up our allocation to Oaktree Specialty Lending Corporation on the back of three key reasons. These reasons have to do with the stock's valuation, its significant upside potential and its higher-quality portfolio - an asset in a weak macro environment. We pared down our allocation to another BDC, Carlyle Secured Lending Inc., to rotate to Oaktree Specialty Lending Corporation.

Business Development Companies (BDCs) offer high income flows for investors by pooling money and investing in small and medium-sized companies, often with high interest rates on loans. Oaktree Specialty Lending Corporation is a BDC with a $3.2 billion investment portfolio, providing investors with strong income and decent growth since 2007. OCSL's diverse portfolio, growing dividend, and disciplined management make it a solid BDC for income-oriented investors, despite potential risks from economic decline or rising interest rates.