In May, OWL held its annual Investor Day. Three things stand out about its presentation.
The first is how much growth is on the table. In 2021, Blue Owl had $900 million in fee-related revenues. By 2023, it expects to double that to $1.8 billion. In terms of after-tax distributable earnings, it plans to double them as well, to $1.0 billion in 2023 from $523 million in 2021. Lastly, it wants to boost its annualized dividend by 40 cents per share (where it was in Q4 2021) to $1 per share in 2023.
The second highlight is how much of an impact fee-related revenues have on its profitability. These revenues have 60% margins. In other words, Blue Owl's distributable earnings are completely driven by fee-related revenues.
Lastly, with just 23% of its investor base outside North America, its global expansion is in the early stages with much growth to come in the years ahead.
With its goal to raise more than $50 billion in fee-related AUM over the next 18 months, there's no question growth is on the table for the foreseeable future. That's what makes OWL one of the best mid-cap stocks for the rest of 2022 and beyond.
Glenn Schorr, an Evercore ISI analyst, reiterated his positive view of
Blue Owl’s all fee-related earnings and all permanent capital model.
“We continue to like OWL’s quality of earnings/stability of results, a
growing yield & best-in-class FRE margins, while also getting
exposure to the fast-growing alts space,” Schorr said in a July 20 note.
He has an Outperform rating for the stock and a $13 target price.