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Capital Southwest

Nasdaq:CSWC
Snowflake Description

Undervalued with moderate growth potential.

The Snowflake is generated from 30 checks in 5 different areas, read more below.
CSWC
Nasdaq
$216M
Market Cap
  1. Home
  2. US
  3. Diversified Financials
Company description

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. The last earnings update was 65 days ago. More info.


Add to Portfolio Compare Print
  • Capital Southwest is a fund or ETF! Currently our data availability for these is poor, we only recommend using them as part of a portfolio.
  • Capital Southwest has significant price volatility in the past 3 months.
CSWC Share Price and Events
7 Day Returns
28.7%
NasdaqGS:CSWC
5.7%
US Capital Markets
2.4%
US Market
1 Year Returns
-45.7%
NasdaqGS:CSWC
-8.3%
US Capital Markets
-10%
US Market
CSWC Shareholder Return
  7 Day 30 Day 90 Day 1 Year 3 Year 5 Year
Capital Southwest (CSWC) 28.7% -29.3% -44.3% -45.7% -28.5% -75.5%
US Capital Markets 5.7% -9% -20.5% -8.3% 8.4% 26.6%
US Market 2.4% -11% -19.4% -10% 9.6% 21.1%
1 Year Return vs Industry and Market
  • CSWC underperformed the Capital Markets industry which returned -8.3% over the past year.
  • CSWC underperformed the Market in United States of America which returned -10% over the past year.
Price Volatility
CSWC
Industry
5yr Volatility vs Market

Value

 Is Capital Southwest undervalued based on future cash flows and its price relative to the stock market?

Value is all about what a company is worth versus what price it is available for. If you went into a grocery store and all the bananas were on sale at half price, they could be considered undervalued.
INTRINSIC VALUE BASED ON FUTURE CASH FLOWS
Here we compare the current share price of Capital Southwest to its discounted cash flow analysis.value.

The discounted cash flow value is simply looking at what the company is worth today, based on estimates of how much money it is expected to make in the future.
Raw Data

Below are the data sources, inputs and calculation used to determine the intrinsic value for Capital Southwest.

NasdaqGS:CSWC Discounted Cash Flow Data Sources
Data Point Source Value
Valuation Model Excess Returns Model
Stable EPS Median Return on Equity from the past 5 years.
= Stable Book Value * Return on Equity
= $18.43 * 9.1%
$1.68
Book Value of Equity per Share Median Book Value from the past 5 years. $18.43
Discount Rate (Cost of Equity) See below 7.5%
Perpetual Growth Rate 10-Year US Government Bond Rate 1.7%

An important part of a discounted cash flow is the discount rate, below we explain how it has been calculated.

Calculation of Discount Rate/ Cost of Equity for NasdaqGS:CSWC
Data Point Calculation/ Source Result
Risk-Free Rate 10-Year US Govt Bond Rate 1.7%
Equity Risk Premium S&P Global 5.4%
Capital Markets Unlevered Beta Simply Wall St/ S&P Global 0.71
Re-levered Beta = Unlevered beta (1 + (1- tax rate) (Debt/Equity))
= 0.707 (1 + (1- 21%) (126.83%))
1.057
Levered Beta Levered Beta limited to 0.8 to 2.0
(practical range for a stable firm)
1.06
Discount Rate/ Cost of Equity = Cost of Equity = Risk Free Rate + (Levered Beta * Equity Risk Premium)
= 1.74% + (1.057 * 5.44%)
7.49%

Discounted Cash Flow Calculation for NasdaqGS:CSWC using Excess Returns Model Model

The calculations below outline how an intrinsic value for Capital Southwest is arrived at using the Excess Return Model. This approach is used for finance firms where free cash flow is difficult to estimate.

In the Excess Return Model the value of a firm can be written as the sum of capital invested currently in the firm and the present value of excess returns that the firm expects to make in the future.

The model is sensitive to the Return on Equity of the company versus the Cost of Equity, how these are calculated is detailed below the main calculation.

Note the calculations below are per share.

See our documentation to learn about this calculation.

NasdaqGS:CSWC Value of Excess Returns
Calculation Result
Excess Returns = (Stable Return on equity – Cost of equity) (Book Value of Equity per share)
= (9.1% – 7.49%) * $18.43)
$0.30
Terminal Value of Excess Returns = Excess Returns / (Cost of Equity - Expected Growth Rate)
= $0.30 / (7.49% - 1.74%)
$5.26
Value of Equity = Book Value per share + Terminal Value of Excess Returns
= $18.43 + $5.26
$23.69
NasdaqGS:CSWC Discount to Share Price
Calculation Result
Value per share (USD) From above. $23.69
Current discount Discount to share price of $11.58
= -1 x ($11.58 - $23.69) / $23.69
51.1%

Learn more about our DCF calculations in Simply Wall St’s analysis model .

Current Discount
Amount off the current price Capital Southwest is available for.
Intrinsic value
>50%
Share price is $11.58 vs Future cash flow value of $23.69
Current Discount Checks
For Capital Southwest to be considered undervalued it must be available for at least 20% below the current price. Less than 40% is even better.
  • Capital Southwest's share price is below the future cash flow value, and at a moderate discount (> 20%).
  • Capital Southwest's share price is below the future cash flow value, and at a substantial discount (> 40%).
PRICE RELATIVE TO MARKET
We can also value a company based on what the stock market is willing to pay for it. This is similar to the price of fruit (e.g. Mangoes or Avocados) increasing when they are out of season, or how much your home is worth.

The amount the stock market is willing to pay for Capital Southwest's earnings, growth and assets is considered below, and whether this is a fair price.
Price based on past earnings
Are Capital Southwest's earnings available for a low price, and how does this compare to other companies in the same industry?
Raw Data
NasdaqGS:CSWC PE (Price to Earnings) Ratio Data Sources
Data Point Source Value
Earnings Per Share * Company Filings (2019-12-31) in USD $0.74
NasdaqGS:CSWC Share Price ** NasdaqGS (2020-04-08) in USD $11.58
United States of America Capital Markets Industry PE Ratio Median Figure of 92 Publicly-Listed Capital Markets Companies 33.4x
United States of America Market PE Ratio Median Figure of 2,948 Publicly-Listed Companies 12.95x

* Trailing twelve months (TTM) annual GAAP earnings per share excluding extraordinary items.

** Primary Listing of Capital Southwest.

NasdaqGS:CSWC PE (Price to Earnings) Ratio Calculation
Calculation Outcome
PE Ratio

= NasdaqGS:CSWC Share Price ÷ EPS (both in USD)

= 11.58 ÷ 0.74

15.61x

Learn more about our ratios and growth rates in Simply Wall St’s analysis model >

  • Capital Southwest is good value based on earnings compared to the US Capital Markets industry average.
  • Capital Southwest is overvalued based on earnings compared to the United States of America market.
Price based on expected Growth
Does Capital Southwest's expected growth come at a high price?
Raw Data
NasdaqGS:CSWC PEG (Price to Earnings to Growth) Ratio Data Sources
Data Point Source Value
PE Ratio See PE Ratio Section 15.61x
Net Income Annual Growth Rate See Future Growth Section.
Line of Best Fit* through Consensus Estimate Earnings of 7 Analysts
69.1%per year
United States of America Capital Markets Industry PEG Ratio Median Figure of 36 Publicly-Listed Capital Markets Companies 1.87x
United States of America Market PEG Ratio Median Figure of 2,010 Publicly-Listed Companies 0.92x

*Line of best fit is calculated by linear regression .

NasdaqGS:CSWC PEG (Price to Earnings to Growth) Ratio Calculation
Calculation Outcome
PEG Ratio

= PE Ratio ÷ Net Income Annual Growth Rate

= 15.61x ÷ 69.1%

0.23x

Learn more about our ratios and growth rates in Simply Wall St’s analysis model >

  • Capital Southwest is good value based on expected growth next year.
Price based on value of assets
What value do investors place on Capital Southwest's assets?
Raw Data
NasdaqGS:CSWC PB (Price to Book) Ratio Data Sources
Data Point Source Value
Book Value per Share Company Filings (2019-12-31) in USD $16.74
NasdaqGS:CSWC Share Price * NasdaqGS (2020-04-08) in USD $11.58
United States of America Capital Markets Industry PB Ratio Median Figure of 192 Publicly-Listed Capital Markets Companies 8.59x
United States of America Market PB Ratio Median Figure of 5,162 Publicly-Listed Companies 1.26x
NasdaqGS:CSWC PB (Price to Book) Ratio Calculation
Calculation Outcome
PB Ratio

= NasdaqGS:CSWC Share Price ÷ Book Value per Share (both in USD)

= 11.58 ÷ 16.74

0.69x

* Primary Listing of Capital Southwest.

Learn more about our ratios and growth rates in Simply Wall St’s analysis model >

  • Capital Southwest is good value based on assets compared to the US Capital Markets industry average.
X
Value checks
We assess Capital Southwest's value by looking at:
  1. Is the discounted cash flow value less than 20%, or 40% of the share price? (2 checks) ( Click here or on bar chart for details of DCF calculation. )
  2. Is the PE ratio less than the market average, and/ or less than the Capital Markets industry average (and greater than 0)? (2 checks)
  3. Is the PEG ratio within a reasonable range (0 to 1)? (1 check)
  4. Is the PB ratio less than the Capital Markets industry average (and greater than 0)? (1 check)
  5. Capital Southwest has a total score of 5/6, see the detailed checks below.

    Note: We use GAAP Earnings per Share in all our calculations including PE and PEG Ratio.

    Full details on the Value part of the Simply Wall St company analysis model.

Future Performance

 How is Capital Southwest expected to perform in the next 1 to 3 years based on estimates from 7 analysts?

The future performance of a company is measured in the same way as past performance, by looking at estimated growth and how much profit it is expected to make.

Future estimates come from professional analysts. Just like forecasting the weather, they don’t always get it right!
Annual Growth Rate
69.1%
Expected annual growth in earnings.
Earnings growth vs Low Risk Savings
Is Capital Southwest expected to grow at an attractive rate?
  • Capital Southwest's earnings growth is expected to exceed the low risk savings rate of 1.7%.
Growth vs Market Checks
  • Capital Southwest's earnings growth is expected to exceed the United States of America market average.
  • Capital Southwest's revenue growth is positive but not above the United States of America market average.
Annual Growth Rates Comparison
Raw Data
NasdaqGS:CSWC Future Growth Rates Data Sources
Data Point Source Value (per year)
NasdaqGS:CSWC Future Earnings Growth Rate Line of Best Fit* through Consensus Estimate Earnings of 7 Analysts 69.1%
NasdaqGS:CSWC Future Revenue Growth Rate Line of Best Fit* through Consensus Estimate Revenue of 7 Analysts 5.5%
United States of America Capital Markets Industry Earnings Growth Rate Market Cap Weighted Average 4.9%
United States of America Capital Markets Industry Revenue Growth Rate Market Cap Weighted Average 2.1%
United States of America Market Earnings Growth Rate Market Cap Weighted Average 13.3%
United States of America Market Revenue Growth Rate Market Cap Weighted Average 7%

*Line of best fit is calculated by linear regression .

Industry and Market average data is calculated daily.

Learn more about our growth rate calculations in Simply Wall St’s analysis model.

Analysts growth expectations
Raw Data
NasdaqGS:CSWC Analysts Growth Expectations Data Sources
Data Point Source Value
Past Financials Company Filings (3 months ago) See Below
Future Estimates Average of up to 7 Analyst Estimates (S&P Global) See Below
All numbers in USD Millions and using Trailing twelve months (TTM) annual period rather than quarterly.
NasdaqGS:CSWC Future Estimates Data
Date (Data in USD Millions) Revenue Cash Flow Net Income * Avg. No. Analysts
2022-03-31 69 33 2
2021-03-31 67 32 7
2020-04-09
2020-03-31 62 10 7
NasdaqGS:CSWC Past Financials Data
Date (Data in USD Millions) Revenue Cash Flow Net Income *
2019-12-31 61 -41 13
2019-09-30 59 -18 24
2019-06-30 57 -80 28
2019-03-31 52 -95 33
2018-12-31 47 -90 38
2018-09-30 43 -133 43
2018-06-30 39 -79 46
2018-03-31 35 -64 39
2017-12-31 33 -69 30
2017-09-30 31 -66 28
2017-06-30 27 -95 26
2017-03-31 23 -90 23

*GAAP earnings excluding extraordinary items.

Super high growth metrics
High Growth Checks
  • Capital Southwest's earnings are expected to grow significantly at over 20% yearly.
  • Capital Southwest's revenue is expected to grow by 5.5% yearly, however this is not considered high growth (20% yearly).
Past and Future Earnings per Share
The accuracy of the analysts who estimate the future performance data can be gauged below. We look back 3 years and see if they were any good at predicting what actually occurred. We also show the highest and lowest estimates looking forward to see if there is a wide range.
Raw Data
NasdaqGS:CSWC Past and Future Earnings per Share
Data Point Source Value
Past Financials Company Filings (3 months ago) See Below
Future Estimates Average of up to 7 Analyst Estimates (S&P Global) See Below

All data from Capital Southwest Company Filings, last reported 3 months ago, and in Trailing twelve months (TTM) annual period rather than quarterly.

NasdaqGS:CSWC Future Estimates Data
Date (Data in USD Millions) EPS * EPS High Estimate EPS Low Estimate Avg. No. Analysts
2022-03-31 3.14 4.60 1.67 2.00
2021-03-31 1.67 1.72 1.61 6.00
2020-04-09
2020-03-31 0.56 0.56 0.56 4.00
NasdaqGS:CSWC Past Financials Data
Date (Data in USD Millions) EPS *
2019-12-31 0.74
2019-09-30 1.39
2019-06-30 1.65
2019-03-31 1.98
2018-12-31 2.28
2018-09-30 2.68
2018-06-30 2.82
2018-03-31 2.45
2017-12-31 1.89
2017-09-30 1.75
2017-06-30 1.65
2017-03-31 1.48

*GAAP earnings excluding extraordinary items.

Performance in 3 years
In the same way as past performance we look at the future estimated return (profit) compared to the available funds. We do this looking forward 3 years.
  • Unable to establish if Capital Southwest will efficiently use shareholders’ funds in the future without estimates of Return on Equity.
X
Future performance checks
We assess Capital Southwest's future performance by looking at:
  1. Is the annual earnings growth rate expected to beat the low risk savings rate, plus a premium to keep pace with inflation?
  2. Is the annual earnings growth rate expected to beat the average growth rate in earnings of the United States of America market? (1 check)
  3. Is the annual revenue growth rate expected to beat the average growth rate in revenue of the United States of America market? (1 check)
  4. Is the annual earnings growth rate expected to be above 20%? (1 check)
  5. Is the annual revenue growth rate expected to be above 20%? (1 check)
  6. Is the Return on Equity in 3 years expected to be over 20%? (1 check)
Some of the above checks will fail if the company is expected to be loss making in the relevant year.
Capital Southwest has a total score of 3/6, see the detailed checks below.

Note 1: We use GAAP Net Income Excluding Exceptional Items for our Earnings in all our calculations.

Full details on the Future part of the Simply Wall St company analysis model.

Past Performance

  How has Capital Southwest performed over the past 5 years?

The past performance of a company can be measured by how much growth it has experienced and how much profit it makes relative to the funds and assets it has available.
Past earnings growth
Below we compare Capital Southwest's growth in the last year to its industry (Capital Markets).
Past Earnings growth analysis
We also check if the company has grown in the past 5 years, and whether it has maintained that growth in the year.
  • Capital Southwest's year on year earnings growth rate has been positive over the past 5 years, however the most recent earnings are below average.
  • Capital Southwest's 1-year earnings growth is negative, it can't be compared to the 5-year average.
  • Capital Southwest's 1-year earnings growth is negative, it can't be compared to the US Capital Markets industry average.
Earnings and Revenue History
Capital Southwest's revenue and profit over the past 5 years is shown below, any years where they have experienced a loss will show up in red.
Raw Data

All data from Capital Southwest Company Filings, last reported 3 months ago, and in Trailing twelve months (TTM) annual period rather than quarterly.

NasdaqGS:CSWC Past Revenue, Cash Flow and Net Income Data
Date (Data in USD Millions) Revenue Net Income * G+A Expenses R&D Expenses
2019-12-31 61.31 13.11 16.17
2019-09-30 59.20 24.26 15.95
2019-06-30 56.57 28.12 15.52
2019-03-31 51.88 33.06 14.95
2018-12-31 47.45 37.54 14.62
2018-09-30 42.60 43.46 14.14
2018-06-30 38.51 45.52 13.81
2018-03-31 35.13 39.31 13.31
2017-12-31 32.98 30.30 13.31
2017-09-30 30.82 27.95 12.98
2017-06-30 27.04 26.22 12.30
2017-03-31 23.47 23.47 12.13
2016-12-31 19.56 20.01 11.53
2016-09-30 16.00 11.00 11.15
2016-06-30 12.35 -4.87 13.32
2016-03-31 9.16 -5.40 12.78
2015-12-31 6.01 25.70 12.93
2015-09-30 10.42 57.53 14.59
2015-06-30 10.13 35.89 10.98
2015-03-31 9.95 53.44 10.30
2014-12-31 11.50 18.60 7.72
2014-09-30 12.15 47.47 6.03
2014-06-30 12.33 122.49 6.65
2014-03-31 12.61 112.01 8.45
2013-12-31 11.46 154.29 8.18
2013-09-30 10.07 122.92 8.25
2013-06-30 10.44 128.69 7.48

*GAAP earnings excluding extraordinary items.

Performance last year
We want to ensure a company is making the most of what it has available. This is done by comparing the return (profit) to a company's available funds, assets and capital.
  • Capital Southwest has not efficiently used shareholders’ funds last year (Return on Equity less than 20%).
  • Capital Southwest used its assets more efficiently than the US Capital Markets industry average last year based on Return on Assets.
  • Capital Southwest has significantly improved its use of capital last year versus 3 years ago (Return on Capital Employed).
X
Past performance checks
We assess Capital Southwest's performance over the past 5 years by checking for:
  1. Has earnings increased in past 5 years? (1 check)
  2. Has the earnings growth in the last year exceeded that of the Capital Markets industry? (1 check)
  3. Is the recent earnings growth over the last year higher than the average annual growth over the past 5 years? (1 check)
  4. Is the Return on Equity (ROE) higher than 20%? (1 check)
  5. Is the Return on Assets (ROA) above industry average? (1 check)
  6. Has the Return on Capital Employed (ROCE) increased from 3 years ago? (1 check)
The above checks will fail if the company has reported a loss in the most recent earnings report. Some checks require at least 3 or 5 years worth of data.
Capital Southwest has a total score of 3/6, see the detailed checks below.

Note: We use GAAP Net Income excluding extraordinary items in all our calculations.

Full details on the Past part of the Simply Wall St company analysis model.

Health

 How is Capital Southwest's financial health and their level of debt?

A company's financial position is much like your own financial position, it includes everything you own (assets) and owe (liabilities).

The boxes below represent the relative size of what makes up Capital Southwest's finances.

The net worth of a company is the difference between its assets and liabilities.
Net Worth
  • Capital Southwest is able to meet its short term (1 year) commitments with its holdings of cash and other short term assets.
  • Capital Southwest's long term commitments exceed its cash and other short term assets.
Balance sheet
This treemap shows a more detailed breakdown of Capital Southwest's finances. If any of them are yellow this indicates they may be out of proportion and red means they relate to one of the checks below.
Assets
Liabilities and shares
The 'shares' portion represents any funds contributed by the owners (shareholders) and any profits.
  • Low level of unsold assets.
  • Debt is not covered by short term assets, assets are 0.1x debt.
Historical Debt
Nearly all companies have debt. Debt in itself isn’t bad, however if the debt is too high, or the company can’t afford to pay the interest on its debts this may have impacts in the future.

The graphic below shows equity (available funds) and debt, we ideally want to see the red area (debt) decreasing.

If there is any debt we look at the companies capability to repay it, and whether the level has increased over the past 5 years.
Raw Data

All data from Capital Southwest Company Filings, last reported 3 months ago.

NasdaqGS:CSWC Past Debt and Equity Data
Date (Data in USD Millions) Total Equity Total Debt Cash & Short Term Investments
2019-12-31 311.86 273.08 22.97
2019-09-30 328.10 247.15 30.02
2019-06-30 328.81 226.44 11.97
2019-03-31 325.96 216.10 9.92
2018-12-31 317.68 196.96 10.77
2018-09-30 307.85 200.41 10.19
2018-06-30 307.38 121.65 12.53
2018-03-31 308.29 95.31 7.91
2017-12-31 298.53 90.24 20.53
2017-09-30 292.51 56.00 33.33
2017-06-30 287.43 25.00 12.36
2017-03-31 285.07 25.00 22.39
2016-12-31 285.44 15.00 32.67
2016-09-30 278.93 0.00 57.84
2016-06-30 273.28 0.00 96.96
2016-03-31 272.64 0.00 95.97
2015-12-31 270.79 0.00 143.68
2015-09-30 275.59 0.00 184.11
2015-06-30 768.79 0.00 212.62
2015-03-31 767.42 0.00 225.80
2014-12-31 733.21 0.00 249.44
2014-09-30 758.27 0.00 122.95
2014-06-30 788.68 0.00 88.15
2014-03-31 770.39 0.00 88.16
2013-12-31 767.85 0.00 65.72
2013-09-30 712.73 0.00 68.18
2013-06-30 668.13 0.00 70.16
  • Capital Southwest's level of debt (87.6%) compared to net worth is high (greater than 40%).
  • Unable to establish if Capital Southwest's debt level has increased without past 5-year debt data.
  • Operating cash flow is negative therefore debt is not well covered.
  • Interest payments on debt are not well covered by earnings (EBIT is 3x annual interest expense, ideally 3x coverage).
X
Financial health checks
We assess Capital Southwest's financial health by checking for:
  1. Are short term assets greater than short term liabilities? (1 check)
  2. Are short term assets greater than long term liabilities? (1 check)
  3. Has the debt to equity ratio increased in the past 5 years? (1 check)
  4. Is the debt to equity ratio over 40%? (1 check)
  5. Is the debt covered by operating cash flow? (1 check)
  6. Are earnings greater than 5x the interest on debt (if company pays interest at all)? (1 check)
  7. Capital Southwest has a total score of 1/6, see the detailed checks below.
For companies that are loss making and have been so on average in the past we replace the last 2 checks with:
  1. Does cash and short term investments cover stable operating expenses (recurring G&A and R&D) for more than 3 years? (1 check)
  2. Does cash and short term investments cover growing operating expenses (recurring G&A and R&D) for more than 3 years? (1 check)


Full details on the Health part of the Simply Wall St company analysis model.

Dividends

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

Dividends are regular cash payments to you from the company, similar to a bank paying you interest on a savings account.
Annual Dividend Income
Dividend payments
17.62%
Current annual income from Capital Southwest dividends. Estimated to be 16.34% next year.
If you bought $2,000 of Capital Southwest shares you are expected to receive $352 in your first year as a dividend.
Dividend Amount
Here we look how much dividend is being paid, if any. Is it above what you can get in a savings account? It is up there with the best dividend paying companies?
  • Capital Southwest's pays a higher dividend yield than the bottom 25% of dividend payers in United States of America (1.93%).
  • Capital Southwest's dividend is above the markets top 25% of dividend payers in United States of America (5.46%).
Annualized Historical and Future Dividends
It is important to see if the dividend for a company is stable, and not wildly increasing/decreasing each year. This graph shows you the historical rate to count toward your assessment of the stock.

We also check to see if the dividend has increased in the past 10 years.
Raw Data
NasdaqGS:CSWC Annualized Past and Future Dividends
Data Point Source Value
Past Annualized Dividend Yield S&P Global Market Data See Below
Past Dividends per Share Company Filings/ Annualized Dividend Payments See Below
Future Dividends per Share Estimates Average of up to 7 Analyst Estimates (S&P Global) See Below
United States of America Capital Markets Industry Average Dividend Yield Market Cap Weighted Average of 44 Stocks 2.4%
United States of America Market Average Dividend Yield Market Cap Weighted Average of 1935 Stocks 2.9%
United States of America Minimum Threshold Dividend Yield 10th Percentile 1.1%
United States of America Bottom 25% Dividend Yield 25th Percentile 1.9%
United States of America Top 25% Dividend Yield 75th Percentile 5.5%

Industry and Market average data is calculated daily.

Note all dividend per share amounts are annualized and not quarterly or other period.

NasdaqGS:CSWC Future Dividends Estimate Data
Date (Data in $) Dividend per Share (annual) Avg. No. Analysts
2022-03-31 1.64 1.00
2021-03-31 1.96 4.00
2020-04-09
2020-03-31 2.75 3.00
NasdaqGS:CSWC Past Annualized Dividends Data
Date (Data in $) Dividend per share (annual) Avg. Yield (%)
2020-02-04 2.040 14.534
2020-02-03 2.040 9.770
2019-11-25 2.000 9.353
2019-11-05 2.000 9.489
2019-11-04 2.000 9.207
2019-08-06 2.000 9.127
2019-08-05 2.000 9.335
2019-06-04 1.960 9.228
2019-06-03 1.960 9.076
2019-02-28 1.520 7.022
2018-11-27 1.440 6.981
2018-08-30 1.360 7.121
2018-08-07 1.160 6.151
2018-08-06 1.160 6.313
2018-06-05 1.160 6.283
2018-06-04 1.160 6.757
2018-02-28 1.120 6.569
2017-11-30 1.040 6.229
2017-08-30 0.960 5.657
2017-05-31 0.840 5.132
2017-02-28 0.760 4.701
2016-12-01 0.680 4.212
2016-09-01 0.440 3.023
2016-08-09 0.240 1.628
2016-08-08 0.240 1.647
2016-06-14 0.240 1.699
2016-03-01 0.160 1.148
2016-02-09 0.000 0.000
2016-02-08 0.000 0.000
2015-11-09 0.200 1.392
2015-04-24 0.200 0.602
2014-10-27 0.200 0.472
2014-04-24 0.200 0.553
2013-10-23 0.200 0.585
2013-04-16 0.200 0.592
2013-02-19 0.200 0.677
2012-10-16 0.200 0.752
2012-04-17 0.200 0.779
2011-10-17 0.200 0.913
2011-04-19 0.200 0.895
2010-10-18 0.200 0.811
2010-04-20 0.200 0.887
2009-10-22 0.200 0.961
2009-04-21 0.200 1.068

Learn more about our ratios and growth rates in Simply Wall St’s analysis model >

  • Dividends per share have been volatile in the past 10 years (annual drop of over 20%).
  • Dividends per share have increased over the past 10 years.
Current Payout to shareholders
What portion of Capital Southwest's earnings are paid to the shareholders as a dividend.
  • Dividends paid are not well covered by earnings (0.5x coverage).
Future Payout to shareholders
  • Dividends after 3 years are not well covered by earnings (1x coverage).
X
Income/ dividend checks
We assess Capital Southwest's dividend by checking for:
  1. Firstly is the company paying a notable dividend (greater than 1.1%) - if not then the rest of the checks are ignored.
  2. Is current dividend yield above the bottom 25% of dividend payers? (1 check)
  3. Is current dividend yield above the top 25% of dividend payers? (1 check)
  4. Have they paid a dividend for 10 years, and during this period has the dividend been volatile (drop of more than 25%)? (1 check)
  5. If they have paid a dividend for 10 years has it increased in this time? (1 check)
  6. How sustainable is the dividend, can Capital Southwest afford to pay it from its earnings today and in 3 years (Payout ratio less than 90%)? (2 checks)
  7. Capital Southwest has a total score of 3/6, see the detailed checks below.


Full details on the Dividends part of the Simply Wall St company analysis model.

Management

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

Management is one of the most important areas of a company. We look at unreasonable CEO compensation, how long the team and board of directors have been around for and insider trading.
CEO
Bowen Diehl
COMPENSATION $2,446,770
AGE 50
TENURE AS CEO 4.6 years
CEO Bio

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 Officer of Capital Southwest Corporation from March 17, 2014 to September 8, 2015 and its Senior Vice President from March 17, 2014 to September 8, 2015. Mr. Diehl joined the Capital Southwest Corporation in 2014 and leads all aspects of the firm’s investment activities and strategic direction. Mr. Diehl served as a Managing Director and Co-Head of the Sponsor Finance Group at American Capital, Ltd. from January 2007 to March 2014, where he was a Principal since 2004 and served as its Senior Vice President of Sponsor Finance. Mr. Diehl joined American Capital, Ltd., in October 2001 as its Vice President. He has vast years of investing experience, including 13 years at American Capital. Prior to American Capital, he served as Vice President of Investment Banking at Merrill Lynch, where he focused on mergers and acquisitions advisory assignments, as well as public debt and equity offerings for companies in the southwest United States. While at American Capital, he closed investments in 15 platform companies and numerous add-on acquisitions, representing over $1.1 billion of invested capital. Mr. Diehl’s investment experience has been in a variety of industries, including industrial manufacturing, healthcare, business services and consumer finance. His investments have been in the form of various securities and structures including first lien, unitrauche, second lien and subordinated debt, as well as preferred and common equity in both control and non-control positions. While at Merrill Lynch, he worked with energy companies in the exploration and production, oilfield services, natural gas pipeline, natural gas gathering and processing, homebuilding and semiconductor sectors. He served with Chase Securities Inc. from 1995 to January 2000, where he served as Vice President of Global Oil and Gas Group. While at Chase, he gained experience in mergers and acquisitions, leveraged buyouts, corporate restructurings, public debt offerings, as well as equity and mezzanine private placements. He serves as the Chairman of the Board of Scientific Protein Laboratories, Meadows of Wickenburg and of ETG Holdings. He has been a Director of Kelly Aerospace since 2004, Network for Medical Communication & Research, LLC since 2001, TestAmerica Holdings, Inc. since 2007 and Forba since 2007. He serves as an Observer to the Board of Tensar Holdings, Inc. He has been Director of Capital Southwest Corporation since October 21, 2015. He serves as a Director at Spotsee Inc. He served as a Director at KBI Biopharma Inc. and ShockWatch, Inc. He served on the Board of ETG Holdings, Inc. since 2005, The Meadows of Wickenburg L.P. since 2006, Scientific Protein Laboratories since 2006. He served on the Board of CreditCards.com since 2009. He has experience in sourcing, structuring and managing investments in a variety of industries. Mr. Diehl holds a Masters of Business Administration from The University of Texas at Austin. He holds a Bachelor of Engineering in Environmental and Geotechnical Engineering and a Bachelor of Arts in Economics from Vanderbilt University.

CEO Compensation
  • Bowen's compensation has been consistent with company performance over the past year, both up more than 20%.
  • Bowen's remuneration is higher than average for companies of similar size in United States of America.
Management Team Tenure

Average tenure of the Capital Southwest management team in years:

4.5
Average Tenure
  • The tenure for the Capital Southwest management team is about average.
Management Team

Bowen Diehl

TITLE
President
COMPENSATION
$2M
AGE
50
TENURE
4.6 yrs

Michael Sarner

TITLE
CFO, Chief Compliance Officer
COMPENSATION
$2M
AGE
46
TENURE
4.6 yrs

Doug Kelley

TITLE
Managing Director
TENURE
5.3 yrs

Josh Weinstein

TITLE
Managing Director

Matt Darrah

TITLE
Principal
TENURE
1.9 yrs

Ryan Kelly

TITLE
Principal

Chris Rehberger

TITLE
VP of Finance & Treasurer
TENURE
4.5 yrs

Amy Baker

TITLE
Controller

Grant Eason

TITLE
Vice President
TENURE
1.3 yrs

Alex Kuhlman

TITLE
Senior Associate
TENURE
1.8 yrs
Board of Directors Tenure

Average tenure and age of the Capital Southwest board of directors in years:

5.1
Average Tenure
55
Average Age
  • The tenure for the Capital Southwest board of directors is about average.
Board of Directors

David Brooks

TITLE
Non-Executive Chairman
COMPENSATION
$132K
AGE
60
TENURE
2.7 yrs

Bowen Diehl

TITLE
President
COMPENSATION
$2M
AGE
50
TENURE
4.5 yrs

Will Thomas

TITLE
Independent Director
COMPENSATION
$102K
AGE
48
TENURE
6.3 yrs

Jack Furst

TITLE
Independent Director
COMPENSATION
$107K
AGE
60
TENURE
5.8 yrs

Christine Battist

TITLE
Independent Director
COMPENSATION
$78K
AGE
50
TENURE
1.7 yrs

T. Morgan

TITLE
Independent Director
COMPENSATION
$110K
AGE
69
TENURE
7.9 yrs
Who owns this company?
Recent Insider Trading
  • More shares have been bought than sold by Capital Southwest individual insiders in the past 3 months.
Recent Insider Transactions
Announced Type Name Entity Role Start End Shares Max Price ($) Value ($)
23. Mar 20 Buy Bowen Diehl Individual 20. Mar 20 20. Mar 20 20,000 $9.46 $189,200
19. Mar 20 Buy Jack Furst Individual 18. Mar 20 18. Mar 20 54,500 $8.84 $481,584
20. Mar 20 Buy Michael Sarner Individual 20. Mar 20 20. Mar 20 21,500 $9.40 $202,100
18. Mar 20 Buy David Brooks Individual 18. Mar 20 18. Mar 20 4,000 $8.90 $35,596
17. Mar 20 Buy Christine Battist Individual 17. Mar 20 17. Mar 20 950 $10.33 $9,815
02. Mar 20 Buy Christine Battist Individual 02. Mar 20 02. Mar 20 537 $18.61 $9,994
28. Feb 20 Buy Michael Sarner Individual 28. Feb 20 28. Feb 20 4,150 $18.15 $75,318
24. Feb 20 Buy Christine Battist Individual 24. Feb 20 24. Feb 20 1,000 $20.35 $20,351
03. Sep 19 Buy David Brooks Individual 30. Aug 19 30. Aug 19 2,500 $21.37 $53,423
30. Aug 19 Buy Christine Battist Individual 28. Aug 19 28. Aug 19 910 $21.85 $19,888
X
Management checks
We assess Capital Southwest's management by checking for:
  1. Is the CEO's compensation unreasonable compared to market cap? (1 check)
  2. Has the CEO's compensation increased more than 20% whilst the EPS is down more then 20%? (1 check)
  3. Is the average tenure of the management team less than 2 years? (1 check)
  4. Is the average tenure of the board of directors team less than 3 years? (1 check)
  5. Capital Southwest has a total score of 0/6, this is not included on the snowflake, see the detailed checks below.


Note: We use the top 6 management executives and board members in our calculations.

Note 2: Insider trading include any internal stakeholders and these transactions .

Full details on the Management part of the Simply Wall St company analysis model.

News

Simply Wall St News

Does Capital Southwest Corporation's (NASDAQ:CSWC) PE Ratio Warrant A Buy?

I am writing today to help inform people who are new to the stock market. … and want to learn about the link between company’s fundamentals and stock market performance. … While this makes CSWC appear like a great stock to buy, you might change your mind after I explain the assumptions behind the P/E ratio.

Simply Wall St -

Only 2 Days Left Before Capital Southwest Corporation (NASDAQ:CSWC) Will Start Trading Ex-Dividend, Is It Worth Buying?

Capital Southwest Corporation (NASDAQ:CSWC) will be distributing its dividend of US$0.89 per share on the 02 July 2018, and will start trading ex-dividend in 2 days time on the 25 June 2018. … Investors looking for higher income-generating stocks to add to their portfolio should keep reading, as I examine Capital Southwest's latest financial data to analyse its dividend characteristics. … 5 questions I ask before picking a dividend stock

Simply Wall St -

Spotlight On Capital Southwest Corporation's (NASDAQ:CSWC) Fundamentals

Attractive stocks have exceptional fundamentals. … that has been a rockstar for income investors, currently trading at an attractive share price … For those interested in understanding where the figures come from and want to see the analysis,

Simply Wall St -

Top Undervalued Financial Stocks To Buy

Financial ompanies that are recently trading at a market price lower than their real values include Capital Southwest and Dynex Capital. … Also, CSWC’s PE ratio is currently around 7.15x compared to its Capital Markets peer level of, 16.19x implying that relative to other stocks in the industry, you can purchase CSWC’s stock for a lower price right now. … In addition to this, GCAP’s PE ratio is currently around 15.2x relative to its Capital Markets peer level of, 16.19x suggesting that relative to other stocks in the industry, you can buy GCAP’s shares at a cheaper price.

Simply Wall St -

What Is The Future Prospect For Financials And Capital Southwest Corporation (NASDAQ:CSWC)?

Capital Southwest Corporation (NASDAQ:CSWC), a US$280.52M small-cap, operates in the capital markets industry, which now face the choice of either being disintermediated or proactively disrupting their own business models to thrive in the future. … As a future industry laggard in growth, Capital Southwest may be a cheaper stock relative to its peers. … Next Steps: Capital Southwest is a capital markets industry laggard in terms of its future growth outlook.

Simply Wall St -

How Does Capital Southwest Corporation (NASDAQ:CSWC) Fare As A Dividend Stock?

Capital Southwest Corporation (NASDAQ:CSWC) has returned to shareholders over the past 10 years, an average dividend yield of 2.00% annually. … Check out our latest analysis for Capital Southwest Here's how I find good dividend stocks Whenever I am looking at a potential dividend stock investment, I always check these five metrics: Is it paying an annual yield above 75% of dividend payers? … Relative to peers, Capital Southwest has a yield of 6.52%, which is high for Capital Markets stocks.Next Steps: Keeping in mind the dividend characteristics above, Capital Southwest is definitely worth considering for investors looking to build a dedicated income portfolio.

Simply Wall St -

Capital Southwest Corporation (NASDAQ:CSWC) Is Trading At A 10% Discount Right Now

Looking at factors such as book values, in addition to the return and cost of equity, can be appropriate for evaluating CSWC’s true value. … The returns in excess of cost of equity is called excess returns: Excess Return Per Share = (Stable Return On Equity – Cost Of Equity) (Book Value Of Equity Per Share) = (10.38% – 10.28%) * $18.44 = $0.02 We use this value to calculate the terminal value of the company, which is how much we expect the company to continue to earn every year, forever. … This is a common component of discounted cash flow models: Terminal Value Per Share = Excess Return Per Share / (Cost of Equity – Expected Growth Rate) = $0.02 / (10.28% – 2.47%) = $0.23 These factors are combined to calculate the true value of CSWC's stock: Value Per Share = Book Value of Equity Per Share + Terminal Value Per Share = $18.44 + $0.23 = $18.67 Relative to the present share price of $16.89, CSWC is , at this time, trading in-line with its true value.

Simply Wall St -

Does Capital Southwest Corporation's (NASDAQ:CSWC) PE Ratio Signal A Buying Opportunity?

Formula Price-Earnings Ratio = Price per share ÷ Earnings per share P/E Calculation for CSWC Price per share = $17.02 Earnings per share = $1.889 ∴ Price-Earnings Ratio = $17.02 ÷ $1.889 = 9x The P/E ratio isn’t a metric you view in isolation and only becomes useful when you compare it against other similar companies. … Ultimately, our goal is to compare the stock’s P/E ratio to the average of companies that have similar attributes to CSWC, such as company lifetime and products sold. … For example, if you are inadvertently comparing lower risk firms with CSWC, then CSWC’s P/E would naturally be lower than its peers, since investors would value those with lower risk with a higher price.

Simply Wall St -

Does Capital Southwest Corporation's (NASDAQ:CSWC) Past Performance Indicate A Stronger Future?

Check out our latest analysis for Capital Southwest Were CSWC's earnings stronger than its past performances and the industry? … Given that these figures may be somewhat nearsighted, I’ve estimated an annualized five-year value for Capital Southwest's net income, which stands at US$61.41M This suggests that, though earnings growth from last year was positive, over time, Capital Southwest's earnings have been declining on average. … Inspecting growth from a sector-level, the US capital markets industry has been growing its average earnings by double-digit 15.39% over the past twelve months, and 10.93% over the past half a decade.

Simply Wall St -

Capital Southwest Corporation (NASDAQ:CSWC): What You Have To Know Before Buying For The Upcoming Dividend

Investors looking for higher income-generating stocks to add to their portfolio should keep reading, as I examine Capital Southwest's latest financial data to analyse its dividend characteristics. … Check out our latest analysis for Capital Southwest How I analyze a dividend stock If you are a dividend investor, you should always assess these five key metrics: Does it pay an annual yield higher than 75% of dividend payers? … NasdaqGS:CSWC Historical Dividend Yield Mar 10th 18 How does Capital Southwest fare?

Simply Wall St -

Company Info

Description

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. The investment structures are Unitranche debt, subordinated debt, senior debt, first and second lien debt, and preferred and common equity. The firm makes equity co-investments alongside debt investments, up to 20% of total check and only makes non-control investments. It prefers to invest in Industrial manufacturing and services, value-added distribution, healthcare products and services, business services, specialty chemicals, food and beverage, tech-enabled services and SaaS models. The firm seeks to invest in energy services and products, industrial technologies, and specialty chemicals and products. Within energy services and products, the firm seeks to invest in each segment of the industry, including upstream, midstream and downstream, excluding exploration and production with a focus on differentiated products and services, equipment and tool rental, consumable products, and drilling and completion chemicals. Within industrial technologies, it seeks to invest in automation and process controls, handling and packaging equipment, industrial filtration and fluid handling, measurement, monitoring and testing, professional tools, and sensors and instrumentation. Within and specialty chemicals and products, the firm seeks to invest in businesses that develop and manufacture highly differentiated chemicals and products including adhesives, coatings and sealants, catalysts and absorbents, cosmeceuticals, fine chemicals, flavors and fragrances, performance lubricants, polymers, plastics and composites, chemical dispensing and filtration equipment, professional and industrial trade consumables and tools, engineered solutions for HVAC, plumbing, and electrical installations, specified high performance materials for fire protection and oilfield applications. It may also invest in exceptional opportunities in building products. The firm seeks to invest in the United States. The firm seeks to make investments ranging from $5 to $25 million in securities. It seeks to make equity investments up to $5 million and debt investments between $5 million and $20 million and co-invest in transaction size upto $40 million. It prefers to invest in companies with revenues approaching above $10 million, profitable operations, historical growth rate of at least 15 percent per year. . Within the lower middle market, it seeks to invest in with less than $15 million in EBITDA and also opportunistically invests in the upper middle market, generally defined as companies with EBITDA in excess of $50 million. In addition to making direct investments, the firm allocates capital to syndicated first and second lien term loans in the upper middle market. Criteria for Upper Middle Market Syndicated 1st Lien is EBITDA Size more than $30 million, Closing Leverage greater than 4 times, investment hold size between $5 million and $7 million, investment yield greater than 6.5%. Criteria for Upper Middle Market Syndicated 2nd Lien is EBITDA Size more than $50 million, Closing Leverage greater than 6 times, investment hold size between $5 million and $7 million, investment yield greater than 9%. It prefers to take a majority and minority stake. The firm has the flexibility to hold investments for very long period in its portfolio companies. It may also invest through warrants. The firm prefers to take Board participation in its portfolio companies. Capital Southwest Corporation was founded on April 19, 1961 and is based in Dallas, Texas.

Details
Name: Capital Southwest Corporation
CSWC
Exchange: NasdaqGS
Founded: 1961
$215,708,511
18,627,678
Website: http://www.capitalsouthwest.com
Address: Capital Southwest Corporation
Lincoln Center Tower 1,
Suite 1300,
Dallas,
Texas, 75240,
United States
Listings
Exchange Symbol Ticker Symbol Security Exchange Country Currency Listed on
NasdaqGS CSWC Common Stock Nasdaq Global Select US USD 02. Jan 1969
Number of employees
Current staff
Staff numbers
22
Capital Southwest employees.
Industry
Asset Management and Custody Banks
Diversified Financials
Company Analysis and Financial Data Status
Area Date (UTC time)
Company Analysis updated: 2020/04/09 01:26
End of day share price update: 2020/04/08 00:00
Last estimates confirmation: 2020/04/01
Last earnings filing: 2020/02/04
Last earnings reported: 2019/12/31
Last annual earnings reported: 2019/03/31


All dates and times in UTC. All financial data provided by Standard & Poor’s Capital IQ.

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.