NasdaqGS:CSWC

Stock Analysis Report

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Market Cap

US$529.4m

Last Updated

2021/07/28 02:41 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


Snowflake Analysis

Average dividend payer and fair value.


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 not significantly more volatile than the rest 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

-0.9%

CSWC

1.5%

US Capital Markets

0.9%

US Market


1 Year Return

92.2%

CSWC

57.0%

US Capital Markets

37.8%

US Market

Return vs Industry: CSWC exceeded the US Capital Markets industry which returned 57% over the past year.

Return vs Market: CSWC exceeded the US Market which returned 37.8% over the past year.


Shareholder returns

CSWCIndustryMarket
7 Day-0.9%1.5%0.9%
30 Day3.8%0.06%0.3%
90 Day2.8%4.6%2.1%
1 Year114.1%92.2%60.4%57.0%40.0%37.8%
3 Year94.4%36.0%72.6%60.1%63.8%53.5%
5 Year185.5%71.4%175.9%142.4%124.6%99.7%

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?

9.43x

Price to Earnings (PE) ratio


Share Price vs. Fair Value

Below Fair Value: CSWC ($25.18) is trading above our estimate of fair value ($22.44)

Significantly Below Fair Value: CSWC is trading above our estimate of fair value.


Price To Earnings Ratio

PE vs Industry: CSWC is good value based on its PE Ratio (9.4x) compared to the US Capital Markets industry average (13.5x).

PE vs Market: CSWC is good value based on its PE Ratio (9.4x) compared to the US market (18.4x).


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 (1.6x) compared to the US Capital Markets industry average (61.5x).


Future Growth

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

-6.8%

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 (-6.8% per year).

Earnings vs Market: CSWC's earnings are forecast to decline over the next 3 years (-6.8% per year).

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

Revenue vs Market: CSWC's revenue (11.8% per year) is forecast to grow faster than the US market (9.2% per year).

High Growth Revenue: CSWC's revenue (11.8% 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 (11.1%).


Past Performance

How has Capital Southwest performed over the past 5 years?

-1.2%

Historical annual earnings growth


Earnings and Revenue History

Quality Earnings: CSWC has a large one-off gain of $19.2M impacting its March 31 2021 financial results.

Growing Profit Margin: CSWC became profitable in the past.


Past Earnings Growth Analysis

Earnings Trend: CSWC has become profitable over the past 5 years, growing earnings by -1.2% per year.

Accelerating Growth: CSWC has become profitable in the last year, making the earnings growth rate difficult to compare to its 5-year average.

Earnings vs Industry: CSWC has become profitable in the last year, making it difficult to compare its past year earnings growth to the Capital Markets industry (51.3%).


Return on Equity

High ROE: CSWC's Return on Equity (15.1%) is considered low.


Financial Health

How is Capital Southwest's financial position?


Financial Position Analysis

Short Term Liabilities: CSWC's short term assets ($43.6M) exceed its short term liabilities ($298.0K).

Long Term Liabilities: CSWC's short term assets ($43.6M) do not cover its long term liabilities ($399.0M).


Debt to Equity History and Analysis

Debt Level: CSWC's debt to equity ratio (113.4%) 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


Dividend

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

8.42%

Current Dividend Yield


Dividend Yield vs Market

Notable Dividend: CSWC's dividend (8.42%) is higher than the bottom 25% of dividend payers in the US market (1.33%).

High Dividend: CSWC's dividend (8.42%) is in the top 25% of dividend payers in the US market (3.53%)


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 reasonable payout ratio (61.8%), CSWC's dividend payments are 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 (107.6% payout ratio).


Next Steps

Management

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

1.5yrs

Average management tenure


CEO

Bowen Diehl (52 yo)

5.83yrs

Tenure

US$2,581,472

Compensation

Mr. Bowen S. Diehl has been the Chief Executive Officer and President of Capital Southwest Corporation since September 30, 2015. He led the relaunch of Capital Southwest Corporation. Mr. Diehl served as th...


CEO Compensation Analysis

Compensation vs Market: Bowen's total compensation ($USD2.58M) is above average for companies of similar size in the US market ($USD1.73M).

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


Leadership Team

Experienced Management: CSWC's management team is not considered experienced ( 1.5 years average tenure), which suggests a new team.


Board Members

Experienced Board: CSWC's board of directors are considered experienced (5.8 years average tenure).


Ownership

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


Insider Trading Volume

Insider Buying: Insufficient data to determine if 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 16.8%.


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$529.375m
  • Shares outstanding: 21.02m
  • Website: https://www.capitalsouthwest.com

Number of Employees


Location

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

Listings


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 Analysis2021/07/28 02:41
End of Day Share Price2021/07/27 00:00
Earnings2021/03/31
Annual Earnings2021/03/31


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.