High-Yield Investment Opportunities at Discounted Rates, Offering Returns up to 11%
If you're tired of playing the guessing game with the stock market, then it's time to invest wisely with these two top picks: Blue Owl Capital Corp. (OBDC) and Verizon (VZ). These high-yield income stocks pay you regardless of market direction, freeing up your time to do what truly matters. Let's dive into the details of these chosen investments!
#1: Blue Owl Capital Corp. (OBDC)
Born from smart lending for U.S. middle market companies, OBDC offers solid solutions that can weather any storm. With a portfolio worth $17.7 billion spread across 236 companies, its investments are primarily first-lien, which places OBDC at the top of the capital stack and provides an extra layer of protection. About 82% of the portfolio consists of senior secured debt, giving you peace of mind. Moreover, 90% of the investments are backed by private equity sponsors, which means that borrowers have undergone multiple layers of vetting and have access to expert guidance.
Despite the 190 basis points decline in ROE from the previous year (Q1 2025), the commitment to the dividend remains strong. The return on equity (ROE) still stands at a solid 10.2%, marking the 11th consecutive quarter of double-digit ROE. Rest assured that the dividend distribution more than covers the regular quarterly dividend rate. The net asset value per share decreased by a small margin, reaching $15.14 due to minor write-downs. The company also boasts a healthy portfolio with low investments on non-accrual at just 0.8% of portfolio fair value.
Looking forward, OBDC is poised to reap the benefits of its merger with OBDE earlier this year. This will yield operational synergies of $5 million in the first year alone, with the benefits expected to carry forward over the long run. With a net debt-to-equity ratio of 1.26x, a solid balance sheet, and $3.0 billion of available liquidity, OBDC presents a great opportunity at $14.59 - a 4% discount from its net asset value per share.
#2: Verizon (VZ)
Verizon continues to dominate the telecom sector, offering wireless services, broadband solutions, and digital enterprise solutions. Despite disappointing shareholder returns, Verizon excels in delivering steady results. In Q1 2025, wireless service revenue grew by 2.7%, reaching the high end of management's guidance range. Moreover, adjusted EBITDA rose by 4%, reaching a record $12.6 billion, and adjusted EPS increased by 3.5%. The company's robust free cash flow growth reached $3.6 billion, an impressive increase from the prior year period.
Verizon's customer base has grown steadily, with customer retention showing potential for improvement as the company plans to add perks to boost loyalty. This includes exclusive discounts on streaming services like Netflix and HBO Max, as well as access to high-profile sporting events. The company's contract with Frontier Communications is soon to be finalized, further enhancing its ability to deliver fiber broadband solutions and helping it challenge AT&T's leadership position in this area.
Debt for Verizon is somewhat elevated but manageable, with a net debt-to-TTM EBITDA ratio of 3.45x. Free cash flow growth will allow the company to continue paying down debt, and there may even be potential for share buybacks after further deleveraging. For now, investors can enjoy a generous 6.3% dividend yield, with the dividend well-covered by a 58% payout ratio and 20 consecutive years of growth.
In summary, both OBDC and VZ are appealing income stocks that deliver steady returns and reassuring fundamentals. OBDC's conservative and first-lien-heavy loan portfolio, combined with consistent double-digit returns on equity, make it a reliable choice for investors seeking income- producing assets. On the other hand, Verizon's robust free cash flow growth, strategic growth in broadband, and commitment to shareholder returns through dividends make it an attractive option for those prioritizing stable income generation. Add both stocks to your portfolio and reap the benefits of double-digit total returns!
[1] https://www.seekingalpha.com/symbol/OBDC[2] https://www.blueowlcapital.com/web/resources/news-events[3] https://www. NASDAQ.com/market-activity/stocks/irhc/fundamentals[4] https://www. blueowlcapital.com/web/resources/assets[5] https://www. NASDAQ.com/symbol/vz
Insurance plays a crucial role in securing OBDC's portfolio, as 90% of the company's investments are backed by private equity sponsors. This insurance provides an added layer of protection and ensures borrowers have access to expert guidance.
For those seeking growth in the personal-finance domain, Verizon (VZ) offers a high dividend yield of 6.3%, making it an attractive option for those prioritizing stable income generation.
In the world of finance and investing, it's essential to diversify one's portfolio. Incorporating both Blue Owl Capital Corp. (OBDC) and Verizon (VZ) can help investors achieve double-digit total returns, balancing steady income generation with potential capital growth.
