NasdaqGS:CSWC

Stock Analysis Report

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Executive Summary

Capital Southwest Corporation is a business development company specializing in credit and private equity and venture capital investments in middle market companies, mezzanine, later stage, mature, late venture, emerging growth, buyouts, recapitalizations and growth capital investments. More Details


Snowflake Analysis

Acceptable track record second-rate dividend payer.


Similar Companies

Share Price & News

How has Capital Southwest's share price performed over time and what events caused price changes?


Latest Share Price and Events

Stable Share Price: CSWC is less volatile than 75% of US stocks over the past 3 months, typically moving +/- 4% a week.

Volatility Over Time: CSWC's weekly volatility (4%) has been stable over the past year.


Market Performance


7 Day Return

-1.4%

CSWC

1.5%

US Capital Markets

-0.4%

US Market


1 Year Return

19.5%

CSWC

45.4%

US Capital Markets

36.2%

US Market

Return vs Industry: CSWC underperformed the US Capital Markets industry which returned 45.4% over the past year.

Return vs Market: CSWC underperformed the US Market which returned 36.2% over the past year.


Shareholder returns

CSWCIndustryMarket
7 Day-1.4%1.5%-0.4%
30 Day9.8%3.3%-2.3%
90 Day22.3%14.5%5.0%
1 Year37.9%19.5%49.0%45.4%39.1%36.2%
3 Year79.6%23.0%35.9%25.9%48.4%39.0%
5 Year141.3%50.6%145.9%115.5%116.6%92.4%

Long-Term Price Volatility Vs. Market

How volatile is Capital Southwest's share price compared to the market and industry in the last 5 years?


Simply Wall St News

Valuation

Is Capital Southwest undervalued compared to its fair value and its price relative to the market?

35.0%

Undervalued compared to fair value


Share Price vs. Fair Value

Below Fair Value: CSWC ($21.59) is trading below our estimate of fair value ($33.19)

Significantly Below Fair Value: CSWC is trading below fair value by more than 20%.


Price To Earnings Ratio

PE vs Industry: CSWC is poor value based on its PE Ratio (25.6x) compared to the US Capital Markets industry average (23.4x).

PE vs Market: CSWC is poor value based on its PE Ratio (25.6x) compared to the US market (21.5x).


Price to Earnings Growth Ratio

PEG Ratio: CSWC's earnings are forecast to decline next year, so we can't calculate its PEG ratio.


Price to Book Ratio

PB vs Industry: CSWC is good value based on its PB Ratio (1.4x) compared to the US Capital Markets industry average (19.8x).


Next Steps

Future Growth

How is Capital Southwest forecast to perform in the next 1 to 3 years based on estimates from 6 analysts?

-2.9%

Forecasted annual earnings growth


Earnings and Revenue Growth Forecasts


Analyst Future Growth Forecasts

Earnings vs Savings Rate: CSWC's earnings are forecast to decline over the next 3 years (-2.9% per year).

Earnings vs Market: CSWC's earnings are forecast to decline over the next 3 years (-2.9% per year).

High Growth Earnings: CSWC's earnings are forecast to decline over the next 3 years.

Revenue vs Market: CSWC's revenue (8.8% per year) is forecast to grow slower than the US market (10% per year).

High Growth Revenue: CSWC's revenue (8.8% per year) is forecast to grow slower than 20% per year.


Earnings per Share Growth Forecasts


Future Return on Equity

Future ROE: CSWC's Return on Equity is forecast to be low in 3 years time (12.9%).


Next Steps

Past Performance

How has Capital Southwest performed over the past 5 years?

-10.0%

Historical annual earnings growth


Earnings and Revenue History

Quality Earnings: CSWC has a large one-off loss of $14.9M impacting its December 31 2020 financial results.

Growing Profit Margin: CSWC's current net profit margins (23.8%) are higher than last year (20.7%).


Past Earnings Growth Analysis

Earnings Trend: CSWC's earnings have declined by 10% per year over the past 5 years.

Accelerating Growth: CSWC's earnings growth over the past year (23.5%) exceeds its 5-year average (-10% per year).

Earnings vs Industry: CSWC earnings growth over the past year (23.5%) exceeded the Capital Markets industry 10.4%.


Return on Equity

High ROE: CSWC's Return on Equity (5%) is considered low.


Next Steps

Financial Health

How is Capital Southwest's financial position?


Financial Position Analysis

Short Term Liabilities: CSWC's short term assets ($56.2M) exceed its short term liabilities ($1.1M).

Long Term Liabilities: CSWC's short term assets ($56.2M) do not cover its long term liabilities ($395.1M).


Debt to Equity History and Analysis

Debt Level: CSWC's debt to equity ratio (122.5%) is considered high.

Reducing Debt: Insufficient data to determine if CSWC's debt to equity ratio has reduced over the past 5 years.

Debt Coverage: CSWC's operating cash flow is negative, therefore debt is not well covered.

Interest Coverage: CSWC's interest payments on its debt are not well covered by EBIT (2.9x coverage).


Balance Sheet


Next Steps

Dividend

What is Capital Southwest current dividend yield, its reliability and sustainability?

9.63%

Current Dividend Yield


Upcoming Dividend Payment


Dividend Yield vs Market

Notable Dividend: CSWC's dividend (9.63%) is higher than the bottom 25% of dividend payers in the US market (1.31%).

High Dividend: CSWC's dividend (9.63%) is in the top 25% of dividend payers in the US market (3.64%)


Stability and Growth of Payments

Stable Dividend: CSWC's dividend payments have been volatile in the past 10 years.

Growing Dividend: CSWC's dividend payments have increased over the past 10 years.


Current Payout to Shareholders

Dividend Coverage: With its high payout ratio (194.4%), CSWC's dividend payments are not well covered by earnings.


Future Payout to Shareholders

Future Dividend Coverage: CSWC's dividends in 3 years are not forecast to be well covered by earnings (110.9% payout ratio).


Next Steps

Management

How experienced are the management team and are they aligned to shareholders interests?

2.2yrs

Average management tenure


CEO

Bowen Diehl (51 yo)

5.5yrs

Tenure

US$1,737,307

Compensation

Mr. Bowen S. Diehl has been the Chief Executive Officer and President of Capital Southwest Corporation since September 31, 2015. He led the relaunch of Capital Southwest Corporation. Mr. Diehl served as th...


CEO Compensation Analysis

Compensation vs Market: Bowen's total compensation ($USD1.74M) is about average for companies of similar size in the US market ($USD1.49M).

Compensation vs Earnings: Bowen's compensation has been consistent with company performance over the past year.


Leadership Team

NamePositionTenureCompensationOwnership
Bowen Diehl
President5.5yrsUS$1.74m2.37%
$ 10.1m
Michael Sarner
CFO, Chief Compliance Officer5.5yrsUS$1.40m1.25%
$ 5.4m
Joshua Weinstein
Managing Directorno datano datano data
Ryan Kelly
Principalno datano datano data
Chris Rehberger
VP of Finance & Treasurer5.42yrsno datano data
Amy Baker
Controllerno datano datano data
Spencer Klein
Vice President0.83yrno datano data
Rachel Bazan
Vice President0.83yrno datano data
Grant Eason
Vice President2.17yrsno datano data
Alex Kuhlman
Senior Associate2.67yrsno datano data
Abishai Pinto
Associate1.17yrsno datano data
Michael Bruley
1.17yrsno datano data

2.2yrs

Average Tenure

Experienced Management: CSWC's management team is considered experienced (2.2 years average tenure).


Board Members

NamePositionTenureCompensationOwnership
Bowen Diehl
President5.5yrsUS$1.74m2.37%
$ 10.1m
Jack Furst
Independent Director6.67yrsUS$111.33k0.39%
$ 1.7m
T. Morgan
Independent Director8.83yrsUS$104.67k0.11%
$ 479.8k
William Thomas
Independent Director7.17yrsUS$107.33kno data
Christine Battist
Independent Director2.58yrsUS$117.00k0.026%
$ 112.1k
David Brooks
Independent Non-Executive Chairman3.58yrsUS$132.00k0.15%
$ 647.7k

6.0yrs

Average Tenure

56yo

Average Age

Experienced Board: CSWC's board of directors are considered experienced (6 years average tenure).


Ownership

Who are the major shareholders and have insiders been buying or selling?


Insider Trading Volume

Insider Buying: CSWC insiders have bought more shares than they have sold in the past 3 months.


Recent Insider Transactions

Ownership Breakdown

Dilution of Shares: Shareholders have been diluted in the past year, with total shares outstanding growing by 6.7%.


Top Shareholders

Company Information

Capital Southwest Corporation's company bio, employee growth, exchange listings and data sources


Key Information

  • Name: Capital Southwest Corporation
  • Ticker: CSWC
  • Exchange: NasdaqGS
  • Founded: 1961
  • Industry: Asset Management and Custody Banks
  • Sector: Diversified Financials
  • Market Cap: US$428.947m
  • Shares outstanding: 19.87m
  • Website: https://www.capitalsouthwest.com

Number of Employees


Location

  • Capital Southwest Corporation
  • Lincoln Center Tower 1
  • Suite 1300
  • Dallas
  • Texas
  • 75240
  • United States

Listings

TickerExchangePrimary SecuritySecurity TypeCountryCurrencyListed on
CSWCNasdaqGS (Nasdaq Global Select)YesCommon StockUSUSDJan 1969
SFWDB (Deutsche Boerse AG)YesCommon StockDEEURJan 1969

Biography

Capital Southwest Corporation is a business development company specializing in credit and private equity and venture capital investments in middle market companies, mezzanine, later stage, mature, late ve...


Company Analysis and Financial Data Status

All financial data provided by Standard & Poor's Capital IQ.
DataLast Updated (UTC time)
Company Analysis2021/03/07 01:09
End of Day Share Price2021/03/05 00:00
Earnings2020/12/31
Annual Earnings2020/03/31


Unless specified all financial data is based on a yearly period but updated quarterly. This is known as Trailing Twelve Month (TTM) or Last Twelve Month (LTM) Data. Learn more here.