Blue Owl Capital (NYSE:OWL) & Sound Point Meridian Capital (NYSE:SPMC) Critical Comparison

Sound Point Meridian Capital (NYSE:SPMC) and Blue Owl Capital (NYSE:OWL) are both finance companies, but which is the superior investment? We will compare the two businesses based on the strength of their earnings, risk, institutional ownership, profitability, analyst recommendations, valuation and dividends.

Analyst Ratings

This is a summary of current ratings and recommmendations for Sound Point Meridian Capital and Blue Owl Capital, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Sound Point Meridian Capital	0	3	1	0	2.25
Blue Owl Capital	0	9	7	1	2.53

Sound Point Meridian Capital currently has a consensus price target of $15.12, indicating a potential upside of 104.67%. Blue Owl Capital has a consensus price target of $13.36, indicating a potential upside of 43.72%. Given Sound Point Meridian Capital’s higher possible upside, equities analysts plainly believe Sound Point Meridian Capital is more favorable than Blue Owl Capital.

Institutional and Insider Ownership

35.9% of Blue Owl Capital shares are owned by institutional investors. 0.9% of Sound Point Meridian Capital shares are owned by insiders. Comparatively, 25.7% of Blue Owl Capital shares are owned by insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a company is poised for long-term growth.

Profitability

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

	Net Margins	Return on Equity	Return on Assets
Sound Point Meridian Capital	N/A	N/A	N/A
Blue Owl Capital	2.71%	23.14%	11.01%

Volatility and Risk

Sound Point Meridian Capital has a beta of 1.2, indicating that its share price is 20% more volatile than the S&P 500. Comparatively, Blue Owl Capital has a beta of 1.35, indicating that its share price is 35% more volatile than the S&P 500.

Earnings and Valuation

This table compares Sound Point Meridian Capital 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
Sound Point Meridian Capital	$72.51 million	2.09	-$118.49 million	($5.78)	-1.28
Blue Owl Capital	$2.87 billion	5.05	$78.83 million	$0.12	77.46

Blue Owl Capital has higher revenue and earnings than Sound Point Meridian Capital. Sound Point Meridian Capital 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.

Dividends

Sound Point Meridian Capital pays an annual dividend of $2.40 per share and has a dividend yield of 32.5%. Blue Owl Capital pays an annual dividend of $0.92 per share and has a dividend yield of 9.9%. Sound Point Meridian Capital pays out -41.5% of its earnings in the form of a dividend. 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. Blue Owl Capital has increased its dividend for 4 consecutive years. Sound Point Meridian Capital is clearly the better dividend stock, given its higher yield and lower payout ratio.

Summary

Blue Owl Capital beats Sound Point Meridian Capital on 15 of the 18 factors compared between the two stocks.

About Sound Point Meridian Capital

Sound Point Meridian Capital Inc. is an externally managed, non-diversified closed-end management investment company. Its investment objective is to generate high current income, with a secondary objective to generate capital appreciation, by investing primarily in third-party collateralized loan obligation equity and mezzanine tranches. Sound Point Meridian Capital Inc. is based in NEW YORK.

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.