Key Points
- Blue Owl Capital is an asset manager that collects fees for investing on behalf of others.
Blue Owl Capital is an asset manager that collects fees for investing on behalf of others.
- The company's assets under management have been growing, and it has been diversifying its business.
The company's assets under management have been growing, and it has been diversifying its business.
Blue Owl Capital (NYSE: OWL) made headlines earlier in 2026 when it limited withdrawals from some of the non-traded private credit funds it oversees. That left investors worried about Blue Owl Capital's asset management business model. At this point, the stock has fallen roughly 45% from its 52-week high, pushing the dividend yield up to a lofty 9%. Here's how investors should be thinking about the dividend today.
Blue Owl Capital has only been public for a few years
Blue Owl Capital went public through a merger with a special purpose acquisition corporation (SPAC) in mid 2021. That date is notable because it means the company's history as a public business is only about five years long. There's no history to look back on for what investors might expect during a deep recession or bear market. It isn't unreasonable to wonder whether the 9% yield is safe given the stock's decline, current economic uncertainty, high inflation, and geopolitical conflicts worldwide.
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From a purely numbers perspective, investors should be worried: The second quarter dividend was $0.23 per share, but the company's distributable earnings were only $0.22 per share. That was actually an improvement over the first quarter, when the dividend was the same, but distributable earnings were only $0.19 per share.
That said, the company generated $0.24 in distributable earnings in the fourth quarter of 2025, which suggests it has the capacity to cover the dividend, even if it isn't doing so right now. Notably, the company has been growing its assets under management since it came public, increasing the base on which it collects management fees. It has also been diversifying the types of investment products it offers, creating more levers for growth. Both suggest the company is moving in the right direction as a business.
Dividend caution is warranted, even for aggressive investors
Still, for risk-averse dividend investors, Blue Owl Capital probably isn't a good investment option. While the company has increased its dividend every year since coming public, the dividend may have grown too much too quickly. There is clearly some strain, and the company has yet to face real economic or market adversity as a public entity.
For more aggressive investors, the company's fee-based business is growing and diversifying, which is good news. Still, trading with caution is appropriate because if asset values fall materially, perhaps during a recession or bear market, the company's fee income will decline as well. That's how the asset management business works, and it could put the dividend under even greater strain than it is today.
Should you buy stock in Blue Owl Capital right now?
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Reuben Gregg Brewer has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.
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