Capital Southwest
Market Cap
US$428.9m
Last Updated
2021/03/07 01:09 UTC
Data Sources
Company Financials +
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
Rewards
Risk Analysis
Earnings are forecast to decline by an average of 2.9% per year for the next 3 years
Dividend of 9.63% is not well covered by earnings or forecast to be in the next 3 years
+ 1 more risk
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
| CSWC | Industry | Market | |
|---|---|---|---|
| 7 Day | -1.4% | 1.5% | -0.4% |
| 30 Day | 9.8% | 3.3% | -2.3% |
| 90 Day | 22.3% | 14.5% | 5.0% |
| 1 Year | 37.9%19.5% | 49.0%45.4% | 39.1%36.2% |
| 3 Year | 79.6%23.0% | 35.9%25.9% | 48.4%39.0% |
| 5 Year | 141.3%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
1 month ago | Simply Wall St
Capital Southwest Corporation Just Beat EPS By 98%: Here's What Analysts Think Will Happen Next1 month ago | Simply Wall St
How Much Did Capital Southwest's (NASDAQ:CSWC) CEO Pocket Last Year?2 months ago | Simply Wall St
Capital Southwest (NASDAQ:CSWC) Share Prices Have Dropped 24% In The Last YearValuation
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
| Name | Position | Tenure | Compensation | Ownership |
|---|---|---|---|---|
| President | 5.5yrs | US$1.74m | 2.37% $ 10.1m | |
| CFO, Chief Compliance Officer | 5.5yrs | US$1.40m | 1.25% $ 5.4m | |
| Managing Director | no data | no data | no data | |
| Principal | no data | no data | no data | |
| VP of Finance & Treasurer | 5.42yrs | no data | no data | |
| Controller | no data | no data | no data | |
| Vice President | 0.83yr | no data | no data | |
| Vice President | 0.83yr | no data | no data | |
| Vice President | 2.17yrs | no data | no data | |
| Senior Associate | 2.67yrs | no data | no data | |
| Associate | 1.17yrs | no data | no data | |
| 1.17yrs | no data | no data |
2.2yrs
Average Tenure
Experienced Management: CSWC's management team is considered experienced (2.2 years average tenure).
Board Members
| Name | Position | Tenure | Compensation | Ownership |
|---|---|---|---|---|
| President | 5.5yrs | US$1.74m | 2.37% $ 10.1m | |
| Independent Director | 6.67yrs | US$111.33k | 0.39% $ 1.7m | |
| Independent Director | 8.83yrs | US$104.67k | 0.11% $ 479.8k | |
| Independent Director | 7.17yrs | US$107.33k | no data | |
| Independent Director | 2.58yrs | US$117.00k | 0.026% $ 112.1k | |
| Independent Non-Executive Chairman | 3.58yrs | US$132.00k | 0.15% $ 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
| Ticker | Exchange | Primary Security | Security Type | Country | Currency | Listed on |
|---|---|---|---|---|---|---|
| CSWC | NasdaqGS (Nasdaq Global Select) | Yes | Common Stock | US | USD | Jan 1969 |
| SFW | DB (Deutsche Boerse AG) | Yes | Common Stock | DE | EUR | Jan 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
| Data | Last Updated (UTC time) |
|---|---|
| Company Analysis | 2021/03/07 01:09 |
| End of Day Share Price | 2021/03/05 00:00 |
| Earnings | 2020/12/31 |
| Annual Earnings | 2020/03/31 |
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.