Loading…
Loading…
I love buying sustainable high-yielding stocks because they do not need to generate much growth to still deliver attractive total returns. I detail some of the most undervalued high yields that I am buying today. I also share why they are cheap and why I think the bears are wrong.
Volatility in major indices has expanded the opportunity set for bargain hunting. In this context, I see opportunities that carry structurally attractive theses, but have been pushed down due to their magnified vol characteristics. I discuss 2 high-yield bargains for income investors willing to accept volatility while awaiting long-term value realization.
Blue Owl Technology Finance Corp. (NYSE:OTF) closed a $150 million private placement of 7.60% senior unsecured notes due September 3, 2032, on September 4. The deal was the company's third financing since June 30 and brought total debt capital raised over that period to $800 million.
Third financing since June 30 brings total debt financing raised to $800 million, further strengthening OTF's liquidity and financial flexibility NEW YORK, Sept. 4, 2026 /PRNewswire/ -- Blue Owl Technology Finance Corp. (NYSE: OTF) ("OTF") today announced the closing of a private placement of $150 million aggregate principal amount of 7.60% senior unsecured notes due September 3, 2032 (the "Notes").
BDCs face a 25% P/NAV discount, largely due to fears of AI-driven SaaS disruption. Current data shows no systemic SaaS defaults or rising credit risk in BDC portfolios. Many of the SaaS giants have been delivering stable and strong results.
Externally managed BDCs face structural challenges, notably high fees and misaligned incentives, making them difficult portfolio inclusions. I favor internally managed BDCs for long-term value, but selectively own some external names as well. There could be two motives for owning external ones: 1) tactical trades (high risk, high retur) and 2) long-term income compounding.
OTF trades at a deep discount to NAV after a 25% stock price drop in just 1 year. OTF's portfolio targets upper middle-market tech companies with mission-critical, sticky products, mitigating AI disruption risks despite 70% software exposure. In my eyes, the current 13% dividend yield is unsustainable due to weak NII coverage. But the management targets coverage improvement by mid-next year.
Blue Owl Technology Finance Corp (OTF) delivered a strong Q2, with a 2.4% total NAV return and robust share repurchases boosting NAV accretion. OTF's 13.9% dividend yield will reset lower as special dividends end, but NII yield is expected to rise through mid-2025 on wider tech loan spreads and higher leverage. Management is upbeat, citing improved technicals, wider spreads in tech lending, and catalysts such as portfolio rotation and increased leverage to drive future income.
SEC filings for OTF aren't indexed yet — common for recently launched funds. Browse the issuer's filings on SEC EDGAR directly.