| Snowflake Score | |
|---|---|
| Valuation | 6/6 |
| Future Growth | 4/6 |
| Past Performance | 0/6 |
| Financial Health | 2/6 |
| Dividends | 3/6 |
CSWC Stock Overview
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.
Capital Southwest Corporation Competitors
Price History & Performance
| Historical stock prices | |
|---|---|
| Current Share Price | US$16.79 |
| 52 Week High | US$28.41 |
| 52 Week Low | US$16.70 |
| Beta | 1.17 |
| 1 Month Change | -14.82% |
| 3 Month Change | -10.60% |
| 1 Year Change | -33.32% |
| 3 Year Change | -20.39% |
| 5 Year Change | -4.11% |
| Change since IPO | 176.95% |
Recent News & Updates
Capital Southwest raises 4% to $0.52/shares
Capital Southwest (NASDAQ:CSWC) declares $0.52/share quarterly dividend, 4% increase from prior dividend of $0.50. Forward yield 11.61% Payable Dec. 30; for shareholders of record Dec. 15; ex-div Dec. 14. See CSWC Dividend Scorecard, Yield Chart, & Dividend Growth.
Capital Southwest goes ex-dividend tomorrow
Capital Southwest (NASDAQ:CSWC) had declared $0.50/share quarterly dividend, 4.2% increase from prior dividend of $0.48. Payable Sept. 30; for shareholders of record Sept. 15; ex-div Sept. 14. See CSWC Dividend Scorecard, Yield Chart, & Dividend Growth.
Capital Southwest: 9% Yield, Dividend Hike, Strong Fiscal Q1 Earnings
CSWC yields 9.42%; management raised the next quarter's regular dividend to $.50. CSWC benefits from rising rates. Fiscal Q1 (Quarter ending 6/30/22) earnings surged. Total investment income up 21%, NII up 37%, NII/share up 14%. Looking for investments which leverage rising rates? Take a look at the BDC industry, where certain companies' investments are mostly floating rate, while their liabilities are fixed rate. Capital Southwest Corporation (CSWC) is a good example of this beneficial situation - 98% of its investments have floating rates. Management estimates that the company will gain $.25/share in NII for a 100 basis point rise in rates. 89% of CSWC's investments in companies are co-sponsored by hedge funds and venture funds, which also give support to these companies during tough times, such as during the pandemic lockdowns. CSWC site Profile: CSWC is an internally managed BDC, specializing in credit and private equity and venture capital investments in lower and middle market companies with EBITDA between $3M and ~$20M; and leverage of 2X to 4X Debt/EBITDA through CSWC's debt position. Holdings: Management added 3 companies to the portfolio in Fiscal Q1 (Quarter ending 6/30/22), which raised the total fair value by 8.6%, to $954M. 1st Lien fair value increased from 84.2% to 85.4%, with 2nd Lien decreasing to 5.1%. The companies' average yield was steady, at 9.3%, as was their leverage, at 4X. CSWC site In addition to its controlled investments, CSWC also manages a JV - its I-45 Senior Loan Fund ("I-45 SLF"), in partnership with Main Street Capital. As of 6/30/22, that portfolio held ~$173.5M in debt investments in 39 companies, with an average issuer EBITDA of ~$78M, and a 6.1% LIBOR spread: CSWC site Management increased CSWC's exposure to Media & Entertainment from 5% to 11% in Fiscal Q1 (Quarter ending 6/30/22). Business Services dropped 200 basis points, from 13% in the previous quarter, to 11% during Fiscal Q1 (Quarter ending 6/30/22). Healthcare also dropped 100 basis points to 9%, while Consumer Products & Retail fell 1%, to 9%. Overall, CSWC's industry exposure looks diverse. CSWC site Portfolio Ratings: CSWC's management reviews and rates its holdings quarterly, using a 4-tier system, with 1 being the highest rating, and 4 being the lowest. As of 6/30/22, ~95% of CSWC's holdings were in the top 2 tiers, stable vs. the quarter ending 3/31/22. There was 1 loan downgraded in the quarter, worth $2.2M, just 0.3% of the portfolio. There are 4 debt investments currently on non-accrual with a fair value of $16.6M, representing ~1.6% of the total investment portfolio, with 1 additional debt investment placed on non-accrual during the quarter. On 7/1/22, one of the non-accruing loans with a fair market value of ~$13M was restructured- CSWC took an equity position as a portion of its debt, giving it more participation in a company turnaround. CSWC site Earnings: Fiscal Q1 (Quarter ending 6/30/22) earnings were strong, with total Investment Income up 21%, NII up over 37%, and NII/share up ~14%. That follows on CSWC's strong fiscal year ending 3/31/22 growth, which had similar double-digit gains in total Investment Income, NII, and NII/share. The share count jumped 20% in Fiscal Q1 (Quarter ending 6/30/22) vs. a year ago. CSWC sold 2,262,852 shares of its common stock during the quarter, under its Equity ATM Program at a weighted-average price of $20.66/share, raising $46.8 million of gross proceeds. Hidden Dividend Stocks Plus New Business: CSWC originated $148.3M in new commitments in Fiscal Q1 (Quarter ending 6/30/22), consisting of investments in six new portfolio companies totaling $139M, and add-on commitments in eight portfolio companies totaling $9.3M. It also received full prepayments on 3 debt investments totaling $47.9M, with a weighted average IRR on the exits of 19.6%; and proceeds from the sale of 1 equity investment totaling $1.7M. Dividends: At its 8/17/22 closing price of $20.38, CSWC yields 9.42%. Although there was no $.15 supplemental dividend declared, management did raise the regular dividend by 4%, from $.48 to $.50. It goes ex-dividend on 9/14/22, with a 9/30/22 pay date. CSWC has one of the best dividend growth rates in the BDC industry, growing from $1.16 in 2016 to $2.56 in 2021. Hidden Dividend Stocks Plus In addition to growing its regular quarterly dividends, CSWC has also paid many smaller supplemental dividends and some occasional large special dividends. CSWC's trailing pre-tax NII/regular dividend coverage factor is 1.05X, as of 6/30/22. It had $.15 in Undistributed Taxable Income/Share, as of 6/30/22. CSWC site Profitability & Leverage: CSWC's ROA, ROE, and EBIT Margin all improved a bit during the past year and remained above BDC industry averages. Its Debt/NAV rose, as management increased the investment portfolio, and is in line with industry averages. Hidden Dividend Stocks Plus The Asset/Debt ratio was slightly lower this quarter, as was the EBIT/Interest coverage ratio. Hidden Dividend Stocks Plus Debt & Liquidity: As of 6/30/22, CSWC had $18.8M in unrestricted cash and money market balances, $161.3M in available borrowings under the Credit Facility. It has no debt maturities until January 2026, when $140M in Notes come due. Its two credit facilities also come due in 2026: CSWC site
Shareholder Returns
| CSWC | US Capital Markets | US Market | |
|---|---|---|---|
| 7D | -5.4% | -3.4% | -3.1% |
| 1Y | -33.3% | -24.0% | -21.5% |
Return vs Industry: CSWC underperformed the US Capital Markets industry which returned -23.7% over the past year.
Return vs Market: CSWC underperformed the US Market which returned -20.3% over the past year.
Price Volatility
| CSWC volatility | |
|---|---|
| CSWC Average Weekly Movement | 3.6% |
| Capital Markets Industry Average Movement | 0.4% |
| Market Average Movement | 6.9% |
| 10% most volatile stocks in US Market | 15.7% |
| 10% least volatile stocks in US Market | 2.8% |
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.
About the Company
| Founded | Employees | CEO | Website |
|---|---|---|---|
| 1961 | 23 | Bowen Diehl | https://www.capitalsouthwest.com |
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. It does not invest in startups, publicly traded companies, real estate developments, project finance opportunities, oil and gas exploration businesses, troubled companies, turnarounds, and companies in which significant senior management is departing. In lower middle market, the firm typically invests in growth financing, bolt-on acquisitions, new platform acquisitions, refinancing, dividend recapitalizations, sponsor-led buyouts, and management buyouts situations.
Capital Southwest Corporation Fundamentals Summary
| CSWC fundamental statistics | |
|---|---|
| Market Cap | US$462.24m |
| Earnings (TTM) | US$30.18m |
| Revenue (TTM) | US$86.18m |
15.3x
P/E Ratio5.4x
P/S RatioIs CSWC overvalued?
See Fair Value and valuation analysisEarnings & Revenue
| CSWC income statement (TTM) | |
|---|---|
| Revenue | US$86.18m |
| Cost of Revenue | US$0 |
| Gross Profit | US$86.18m |
| Other Expenses | US$56.00m |
| Earnings | US$30.18m |
Last Reported Earnings
Jun 30, 2022
Next Earnings Date
n/a
| Earnings per share (EPS) | 1.10 |
| Gross Margin | 100.00% |
| Net Profit Margin | 35.02% |
| Debt/Equity Ratio | 127.6% |
How did CSWC perform over the long term?
See historical performance and comparisonDividends
13.3%
Current Dividend Yield148%
Payout RatioDoes CSWC pay a reliable dividends?
See CSWC dividend history and benchmarks| Capital Southwest dividend dates | |
|---|---|
| Ex Dividend Date | Dec 14 2022 |
| Dividend Pay Date | Dec 30 2022 |
| Days until Ex dividend | 75 days |
| Days until Dividend pay date | 91 days |
Does CSWC pay a reliable dividends?
See CSWC dividend history and benchmarks