NasdaqGS:CSWC

Stock Analysis Report

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.

Rewards


Snowflake Analysis


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

-0.09%

CSWC

0.5%

US Capital Markets

-0.3%

US Market


1 Year Return

6.2%

CSWC

20.1%

US Capital Markets

18.6%

US Market

Return vs Industry: CSWC underperformed the US Capital Markets industry which returned 20.1% over the past year.

Return vs Market: CSWC underperformed the US Market which returned 18.6% over the past year.


Shareholder returns

CSWCIndustryMarket
7 Day-0.09%0.5%-0.3%
30 Day4.7%5.4%2.2%
90 Day1.8%7.6%5.6%
1 Year16.2%6.2%22.4%20.1%21.1%18.6%
3 Year85.4%43.1%39.5%31.6%45.6%36.2%
5 Year-26.2%-44.0%84.0%66.9%71.1%52.2%

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?

4.1%

Undervalued compared to fair value


Share Price vs. Fair Value

Below Fair Value: CSWC ($22.05) is trading below our estimate of fair value ($22.98)

Significantly Below Fair Value: CSWC is trading below fair value, but not by a significant amount.


Price To Earnings Ratio

PE vs Industry: CSWC is good value based on its PE Ratio (15.8x) compared to the Capital Markets industry average (33.2x).

PE vs Market: CSWC is good value based on its PE Ratio (15.8x) compared to the US market (18.5x).


Price to Earnings Growth Ratio

PEG Ratio: CSWC is good value based on its PEG Ratio (0.7x)


Price to Book Ratio

PB vs Industry: CSWC is good value based on its PB Ratio (1.2x) compared to the US Capital Markets industry average (6.3x).

Future Growth

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

22.3%

Forecasted annual earnings growth


Earnings and Revenue Growth Forecasts


Analyst Future Growth Forecasts

Earnings vs Savings Rate: CSWC's forecast earnings growth (22.3% per year) is above the savings rate (1.7%).

Earnings vs Market: CSWC's earnings (22.3% per year) are forecast to grow faster than the US market (14.2% per year).

High Growth Earnings: earnings are expected to grow significantly over the next 3 years.

Revenue vs Market: CSWC's revenue (10.3% per year) is forecast to grow faster than the US market (7.4% per year).

High Growth Revenue: CSWC's revenue (10.3% 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 (10.3%).

Past Performance

How has Capital Southwest performed over the past 5 years?

0.7%

Historical annual earnings growth


Earnings and Revenue History

Quality Earnings: CSWC has high quality earnings.

Growing Profit Margin: CSWC's current net profit margins (41%) are lower than last year .


Past Earnings Growth Analysis

Earnings Trend: CSWC's earnings have grown by 0.7% per year over the past 5 years.

Accelerating Growth: CSWC's has had negative earnings growth over the past year, so it can't be compared to its 5-year average.

Earnings vs Industry: CSWC had negative earnings growth (-44.2%) over the past year, making it difficult to compare to the Capital Markets industry average (20.6%).


Return on Equity

High ROE: CSWC's Return on Equity (7.4%) is considered low.


Return on Assets


Return on Capital Employed

Financial Health

How is Capital Southwest's financial position? (This company is analysed differently as a bank or financial institution)


Financial Position Analysis


Debt to Equity History and Analysis


Balance Sheet

Inventory Level: CSWC has a low level of unsold assets or inventory.

Debt Coverage by Assets: CSWC's debt is not covered by short term assets (assets are 0.2x debt).


Financial Institutions Analysis

Asset Level: CSWC's level of assets compared to its equity is low.

Allowance for Bad Loans: Insufficient data to determine if CSWC has a sufficient allowance for bad loans.

Low Risk Liabilities: CSWC reports no customer deposits, loans are made up entirely of externally borrowed funds.

Loan Level: Insufficient data to determine if CSWC has an acceptable proportion of non-loan assets held.

Low Risk Deposits: CSWC has advanced significantly more loans than the customer deposits it holds.

Level of Bad Loans: Insufficient data to determine if CSWC has an appropriate level of bad loans.

Dividend

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

9.07%

Current Dividend Yield


Upcoming Dividend Payment

Purchase Capital Southwest before the 'Buy Limit' to receive their next dividend payment.


Dividend Yield vs Market

company9.1%marketbottom25%1.4%markettop25%3.7%industryaverage1.9%forecastin3Years8.4%

Current dividend yield vs market & industry

Notable Dividend: CSWC's dividend (9.07%) is higher than the bottom 25% of dividend payers in the US market (1.42%).

High Dividend: CSWC's dividend (9.07%) is in the top 25% of dividend payers in the US market (3.7%)


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 (109.9%), 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 (98.5% payout ratio).

Management

What is the CEO of Capital Southwest's salary, the management and board of directors tenure and is there insider trading?

4.2yrs

Average management tenure


CEO

Bowen Diehl (50yo)

4.3yrs

Tenure

US$2,446,770

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 ($USD2.45M) is above average for companies of similar size in the US market ($USD1.71M).

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


Management Age and Tenure

4.2yrs

Average Tenure

Experienced Management: CSWC's management team is considered experienced (4.2 years average tenure).


Board Age and Tenure

4.8yrs

Average Tenure

55yo

Average Age

Experienced Board: CSWC's board of directors are considered experienced (4.8 years average tenure).


Insider Trading

Insider Buying: Insufficient data to determine if insiders have bought more shares than they have sold in the past 3 months.


Recent Insider Transactions

BuyUS$53,42303 Sep 19
David Brooks
EntityIndividual
Role
Chairman of the Board
Non-Executive Chairman
Shares2,500
Max PriceUS$21.37
BuyUS$19,88830 Aug 19
Christine Battist
EntityIndividual
Role
Member of the Board of Directors
Independent Director
Shares910
Max PriceUS$21.85
BuyUS$118,46927 Dec 18
Jack Furst
EntityIndividual
Role
Member of the Board of Directors
Independent Director
Shares6,404
Max PriceUS$18.78

Ownership Breakdown

Dilution of Shares: Shareholders have been diluted in the past year, with total shares outstanding growing by 7.6%.


Management Team

  • Bowen Diehl (50yo)

    President

    • Tenure: 4.3yrs
    • Compensation: US$2.45m
  • Matt Darrah

    Principal

    • Tenure: 1.6yrs
  • Doug Kelley

    Managing Director

    • Tenure: 4.9yrs
  • Grant Eason

    Vice President

    • Tenure: 0.9yrs
  • Josh Weinstein

    Managing Director

    • Tenure: 0yrs
  • Michael Sarner (46yo)

    CFO, Chief Compliance Officer

    • Tenure: 4.3yrs
    • Compensation: US$1.91m
  • Chris Rehberger

    VP of Finance & Treasurer

    • Tenure: 4.2yrs
  • Ryan Kelly

    Principal

    • Tenure: 0yrs
  • Curtis Harrison

    Principal

    • Tenure: 2.3yrs
  • Amy Baker

    Controller

    • Tenure: 0yrs

Board Members

  • Jack Furst (60yo)

    Independent Director

    • Tenure: 5.4yrs
    • Compensation: US$107.00k
  • Bowen Diehl (50yo)

    President

    • Tenure: 4.3yrs
    • Compensation: US$2.45m
  • T. Morgan (69yo)

    Independent Director

    • Tenure: 7.6yrs
    • Compensation: US$110.00k
  • Will Thomas (48yo)

    Independent Director

    • Tenure: 5.9yrs
    • Compensation: US$102.00k
  • Christine Battist (50yo)

    Independent Director

    • Tenure: 1.3yrs
  • David Brooks (60yo)

    Non-Executive Chairman

    • Tenure: 2.3yrs
    • Compensation: US$132.00k

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$394.401m
  • Shares outstanding: 17.93m
  • 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 Analysis2019/12/06 23:33
End of Day Share Price2019/12/06 00:00
Earnings2019/09/30
Annual Earnings2019/03/31


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.