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

Fair value with moderate growth potential.


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 has not had significant price volatility in the past 3 months.


Market Performance


7 Day Return

4.0%

CSWC

-0.2%

US Capital Markets

0.4%

US Market


1 Year Return

-36.6%

CSWC

8.3%

US Capital Markets

17.8%

US Market

Return vs Industry: CSWC underperformed the US Capital Markets industry which returned 8.3% over the past year.

Return vs Market: CSWC underperformed the US Market which returned 17.8% over the past year.


Shareholder returns

CSWCIndustryMarket
7 Day4.0%-0.2%0.4%
30 Day-1.0%6.5%6.1%
90 Day7.0%3.7%8.9%
1 Year-24.8%-36.6%11.0%8.3%20.5%17.8%
3 Year17.5%-18.3%22.9%13.5%42.3%32.9%
5 Year47.8%-5.2%70.3%49.0%84.2%63.4%

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?

24.7%

Undervalued compared to fair value


Share Price vs. Fair Value

Below Fair Value: CSWC ($14.02) is trading below our estimate of fair value ($18.63)

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


Price To Earnings Ratio

PE vs Industry: CSWC is unprofitable, so we can't compare its PE Ratio to the US Capital Markets industry average.

PE vs Market: CSWC is unprofitable, so we can't compare its PE Ratio to the US market.


Price to Earnings Growth Ratio

PEG Ratio: Insufficient data to calculate CSWC's PEG Ratio to determine if it is good value.


Price to Book Ratio

PB vs Industry: CSWC is good value based on its PB Ratio (0.9x) compared to the US Capital Markets industry average (4.7x).


Next Steps

Future Growth

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

65.7%

Forecasted annual earnings growth


Earnings and Revenue Growth Forecasts


Analyst Future Growth Forecasts

Earnings vs Savings Rate: CSWC is forecast to become profitable over the next 3 years, which is considered faster growth than the savings rate (2.2%).

Earnings vs Market: CSWC is forecast to become profitable over the next 3 years, which is considered above average market growth.

High Growth Earnings: CSWC's is expected to become profitable in the next 3 years.

Revenue vs Market: CSWC's revenue (8.8% per year) is forecast to grow slower than the US market (9.9% 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: Insufficient data to determine if CSWC's Return on Equity is forecast to be high in 3 years time


Next Steps

Past Performance

How has Capital Southwest performed over the past 5 years?

-13.0%

Historical annual earnings growth


Earnings and Revenue History

Quality Earnings: CSWC is currently unprofitable.

Growing Profit Margin: CSWC is currently unprofitable.


Past Earnings Growth Analysis

Earnings Trend: CSWC is unprofitable, and losses have increased over the past 5 years at a rate of 13% per year.

Accelerating Growth: Unable to compare CSWC's earnings growth over the past year to its 5-year average as it is currently unprofitable

Earnings vs Industry: CSWC is unprofitable, making it difficult to compare its past year earnings growth to the Capital Markets industry (14.1%).


Return on Equity

High ROE: CSWC has a negative Return on Equity (-7.27%), as it is currently unprofitable.


Next Steps

Financial Health

How is Capital Southwest's financial position?


Financial Position Analysis

Short Term Liabilities: CSWC's short term assets ($26.6M) exceed its short term liabilities ($736.0K).

Long Term Liabilities: CSWC's short term assets ($26.6M) do not cover its long term liabilities ($340.5M).


Debt to Equity History and Analysis

Debt Level: CSWC's debt to equity ratio (119.3%) 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 is unprofitable, therefore interest payments are not well covered by earnings.


Balance Sheet


Next Steps

Dividend

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

14.55%

Current Dividend Yield


Dividend Yield vs Market

Notable Dividend: CSWC's dividend (14.55%) is higher than the bottom 25% of dividend payers in the US market (1.63%).

High Dividend: CSWC's dividend (14.55%) is in the top 25% of dividend payers in the US market (4.56%)


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: CSWC is paying a dividend but the company is unprofitable.


Future Payout to Shareholders

Future Dividend Coverage: Insufficient data to determine if a dividend will be paid in 3 years and that it will be covered by earnings.


Next Steps

Management

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

2.3yrs

Average management tenure


CEO

Bowen Diehl (51 yo)

5.08yrs

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 the firm. Mr. Diehl served as the Chief Investment Of ...


CEO Compensation Analysis

Compensation vs Market: Bowen's total compensation ($USD1.74M) is above average for companies of similar size in the US market ($USD1.23M).

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


Leadership Team

NamePositionTenureCompensationOwnership
Bowen Diehl
President5.08yrsUS$1.74m2.53%
$ 6.6m
Michael Sarner
CFO, Chief Compliance Officer5.08yrsUS$1.40m1.34%
$ 3.5m
Douglas Kelley
Managing Director5.75yrsno datano data
Joshua Weinstein
Managing Directorno datano datano data
Ryan Kelly
Principalno datano datano data
Chris Rehberger
VP of Finance & Treasurer5yrsno datano data
Amy Baker
Controllerno datano datano data
Spencer Klein
Vice President0.42yrno datano data
Rachel Bazan
Vice President0.42yrno datano data
Grant Eason
Vice President1.75yrsno datano data
Alex Kuhlman
Senior Associate2.25yrsno datano data
Abishai Pinto
Associate0.75yrno datano data

2.3yrs

Average Tenure

Experienced Management: CSWC's management team is considered experienced (2.3 years average tenure).


Board Members

NamePositionTenureCompensationOwnership
Bowen Diehl
President5.08yrsUS$1.74m2.53%
$ 6.6m
Jack Furst
Independent Director6.25yrsUS$111.33k0.42%
$ 1.1m
T. Morgan
Independent Director8.42yrsUS$104.67k0.12%
$ 311.6k
William Thomas
Independent Director6.75yrsUS$107.33k0%
$ 0
Christine Battist
Independent Director2.17yrsUS$117.00k0.028%
$ 72.8k
David Brooks
Independent Non-Executive Chairman3.17yrsUS$132.00k0.15%
$ 399.6k

5.6yrs

Average Tenure

56yo

Average Age

Experienced Board: CSWC's board of directors are considered experienced (5.6 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 5%.


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$260.606m
  • Shares outstanding: 18.59m
  • 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

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 Analysis2020/10/26 05:41
End of Day Share Price2020/10/23 00:00
Earnings2020/06/30
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.