Blue Owl Capital (NYSE:OWL – Get Free Report) and PennantPark Investment (NASDAQ:PNNT – Get Free Report) are both finance companies, but which is the superior stock? We will compare the two companies based on the strength of their dividends, analyst recommendations, risk, profitability, institutional ownership, valuation and earnings.
Insider & Institutional Ownership
35.8% of Blue Owl Capital shares are held by institutional investors. Comparatively, 26.6% of PennantPark Investment shares are held by institutional investors. 25.7% of Blue Owl Capital shares are held by company insiders. Comparatively, 3.0% of PennantPark Investment shares are held by company insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a company will outperform the market over the long term.
Analyst Ratings
This is a summary of recent ratings for Blue Owl Capital and PennantPark Investment, as reported by MarketBeat.com.
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score | |
| Blue Owl Capital | 0 | 8 | 7 | 1 | 2.56 |
| PennantPark Investment | 1 | 3 | 1 | 0 | 2.00 |
Valuation and Earnings
This table compares Blue Owl Capital and PennantPark Investment”s top-line revenue, earnings per share and valuation.
| Gross Revenue | Price/Sales Ratio | Net Income | Earnings Per Share | Price/Earnings Ratio | |
| Blue Owl Capital | $2.99 billion | 5.51 | $78.83 million | $0.12 | 88.09 |
| PennantPark Investment | $21.50 million | 10.89 | $48.85 million | $0.16 | 22.41 |
Blue Owl Capital has higher revenue and earnings than PennantPark Investment. PennantPark Investment 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.
Profitability
This table compares Blue Owl Capital and PennantPark Investment’s net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets | |
| Blue Owl Capital | 2.71% | 23.14% | 11.01% |
| PennantPark Investment | 11.33% | 11.59% | 4.23% |
Risk and Volatility
Blue Owl Capital has a beta of 1.22, indicating that its share price is 22% more volatile than the S&P 500. Comparatively, PennantPark Investment has a beta of 0.61, indicating that its share price is 39% less volatile than the S&P 500.
Dividends
Blue Owl Capital pays an annual dividend of $0.92 per share and has a dividend yield of 8.7%. PennantPark Investment pays an annual dividend of $0.48 per share and has a dividend yield of 13.4%. Blue Owl Capital pays out 766.7% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. PennantPark Investment pays out 300.0% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Blue Owl Capital has raised its dividend for 4 consecutive years and PennantPark Investment has raised its dividend for 1 consecutive years. PennantPark Investment is clearly the better dividend stock, given its higher yield and lower payout ratio.
Summary
Blue Owl Capital beats PennantPark Investment on 12 of the 18 factors compared between the two stocks.
About Blue Owl Capital
Blue Owl Capital Inc. operates as an asset manager in the United States. The company offers permanent capital base solutions that enables it to offer holistic framework of capital solutions to middle market companies, large alternative asset managers, and corporate real estate owners and tenants. It also provides direct lending products that offer private credit products comprising diversified, technology, first lien, and opportunistic lending to middle-market companies; liquid credit; GP strategic capital products, which offers capital solutions, including GP minority stakes, GP debt financing, and professional sports minority stakes; and real estate products that focuses on acquiring triple net lease real estate by investment grade or creditworthy tenants. It offers its solutions through permanent capital vehicles, as well as long-dated private funds. Blue Owl Capital Inc. is headquartered in New York, New York.
About PennantPark Investment
PennantPark Investment Corporation, a business development company is a private equity fund specializes in direct and mezzanine investments in middle market companies. It invests in the form of mezzanine debt, senior secured loans, and equity investments. The fund typically invests in buildings and real estate, hotels, gaming and leisure, technology, telecommunications, transportation, information technology services, electronics, healthcare & pharmaceuticals, education and childcare, financial services, printing and publishing, consumer products, business services, energy & Related Services and utilities, distribution, oil and gas, media, environmental services, aerospace and defense, building materials, capital equipment, chemicals, plastics, & rubber, food & beverage, wholesale, manufacturing and basic industries and retail. It invests in equity securities and debt transactions through preferred stock, common stock, warrants, options, senior secured debt, subordinated debt, subordinated loans, first lien debt, mezzanine loans, and distressed debt securities and private equity co-investments. It seeks to invest in companies based in the United States. The fund seeks to invest between $10 million and $100 million cross the capital structure (senior secured loans, subordinated debt, and other investments) in its portfolio companies with EBITDA between $10 to $50 million. Its mezzanine loans, senior secured loans, and other investments in its portfolio companies are between $15 million and $50 million. The fund may also make non-control equity and debt investments.
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