Financial Contrast: Blue Owl Capital (NYSE:OBDC) and PhenixFIN (NYSE:PFX)

PhenixFIN (NYSE:PFX) and Blue Owl Capital (NYSE:OBDC) are both finance companies, but which is the superior business? We will compare the two companies based on the strength of their risk, profitability, dividends, institutional ownership, valuation, earnings and analyst recommendations.

Analyst Recommendations

This is a breakdown of recent ratings and price targets for PhenixFIN and Blue Owl Capital, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
PhenixFIN	0	0	0	1	4.00
Blue Owl Capital	0	3	4	1	2.75

Blue Owl Capital has a consensus target price of $13.00, indicating a potential upside of 17.17%. Given Blue Owl Capital’s higher possible upside, analysts clearly believe Blue Owl Capital is more favorable than PhenixFIN.

Earnings and Valuation

This table compares PhenixFIN and Blue Owl Capital”s gross revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
PhenixFIN	$14.16 million	6.28	$18.62 million	$2.41	19.12
Blue Owl Capital	$1.85 billion	2.96	$800.36 million	$0.56	19.81

Blue Owl Capital has higher revenue and earnings than PhenixFIN. PhenixFIN is trading at a lower price-to-earnings ratio than Blue Owl Capital, indicating that it is currently the more affordable of the two stocks.

Insider & Institutional Ownership

43.3% of PhenixFIN shares are held by institutional investors. Comparatively, 42.8% of Blue Owl Capital shares are held by institutional investors. 25.2% of PhenixFIN shares are held by insiders. Comparatively, 0.1% of Blue Owl Capital shares are held by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a stock will outperform the market over the long term.

Dividends

PhenixFIN pays an annual dividend of $0.48 per share and has a dividend yield of 1.0%. Blue Owl Capital pays an annual dividend of $0.08 per share and has a dividend yield of 0.7%. PhenixFIN pays out 19.9% of its earnings in the form of a dividend. Blue Owl Capital pays out 14.3% of its earnings in the form of a dividend. Both companies have healthy payout ratios and should be able to cover their dividend payments with earnings for the next several years. Blue Owl Capital has raised its dividend for 2 consecutive years.

Profitability

This table compares PhenixFIN and Blue Owl Capital’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
PhenixFIN	72.98%	2.95%	1.68%
Blue Owl Capital	16.99%	9.49%	4.19%

Risk and Volatility

PhenixFIN has a beta of 0.28, meaning that its share price is 72% less volatile than the S&P 500. Comparatively, Blue Owl Capital has a beta of 0.63, meaning that its share price is 37% less volatile than the S&P 500.

Summary

Blue Owl Capital beats PhenixFIN on 10 of the 17 factors compared between the two stocks.

About PhenixFIN

PhenixFIN Corporation is a business development company. The firm seeks to invest in privately negotiated debt and equity securities of small and middle market companies. It primarily invests in the following sectors: business services; buildings and real estate; automobile; oil and gas; aerospace and defense; home and office furnishings, housewares, and durable consumer products; healthcare, education and childcare; personal, food, and miscellaneous services; retail stores, diversified or conglomerate manufacturing; telecommunications; mining, steel, iron, and non-precious metals; leisure, amusement, motion pictures, and entertainment; chemicals, plastics, and rubber; finance; personal and nondurable consumer products (manufacturing only); beverage, food, and tobacco; containers, packaging, and glass; structure finance securities; machinery (non-agriculture, non-construction, non-electric); diversified or conglomerate service; restaurant and franchise; electronics; and cargo transport. The fund seeks to invest in companies located in North America. The fund targets private debt transactions in companies with enterprise values or asset values between $25 million and $250 million. The fund seeks to invest in companies with debt investment values between $10 million and $50 million. It exits its investments between three years and seven years; it holds most of its investments to maturity or repayment, but may realize or sell some investments earlier. The fund may take a board seat on its investee companies and can also offer managerial assistance to certain portfolio companies. It structures its investments as first lien senior secured loans, second lien senior secured loans, senior secured notes, senior subordinated notes, subordinate notes, unitranche loans, and seeks warrants or other equity participation. The fund may co-invest in privately negotiated transactions under certain conditions. PhenixFIN Corporation was founded in 2010 and is headquartered in New York, New York.

About Blue Owl Capital

Blue Owl Capital Corporation is a business development company. It specializes in direct and fund of fund investments. The fund makes investments in senior secured, direct lending or unsecured loans, subordinated loans or mezzanine loans and also considers equity-related securities including warrants and preferred stocks also pursues preferred equity investments, first lien, unitranche, and second lien term loans and common equity investments. Within private equity, it seeks to invest in growth, acquisitions, market or product expansion, refinancings and recapitalizations. It seeks to invest in middle market and upper middle market companies based in the United States, with EBITDA between $10 million and $250 million annually and/or annual revenue of $50 million and $2.5 billion at the time of investment. It seeks to invest in investments with maturities typically between three and ten years. It seeks to make investments generally ranging in size between $20 million and $250 million.