Ladenburg Thalmann analyst Mickey Schleien initiated coverage on Owl Rock Capital Corp. with a "buy" rating and a price target of $17.

Schleien noted in a research note that the business development company has a conservative portfolio, with 81% of that composed of first-lien/unitranche investments followed by second liens at 17%. Owl Rock Capital's high allocation of first-lien loans should help the company in cases of an economic slowdown, he said. Schleien also views the company's loan portfolio as "relatively defensive and well-diversified" in addition to having low credit watch investments and no nonperforming loans.

It remains to be seen if, beyond 2020, Owl Rock Capital will continue to waive fees, something it has agreed to do for five quarters following its IPO, and/or whether it will pursue higher leverage to continue to provide a competitive dividend yield, the analyst said.