(CSWC) Capital Southwest - Overview
Sector: Financial Services | Industry: Asset Management | Exchange: NASDAQ (USA) | Market Cap: 1.444m USD | Total Return: 26.4% in 12m
Avg Turnover: 14.7M
EPS Trend: -2.1%
Qual. Beats: 0
Rev. Trend: 95.9%
Qual. Beats: 0
Warnings
Share dilution 22.0% YoY
Tailwinds
No distinct edge detected
Capital Southwest Corporation (CSWC) is an internally managed Business Development Company (BDC) that provides customized financing solutions to lower middle market companies. The firm focuses on senior debt, unitranche debt, and non-control equity co-investments, typically avoiding early-stage startups, real estate, and distressed turnarounds.
The company maintains an industry-agnostic approach but emphasizes sectors such as industrial technologies, value-added distribution, and SaaS models. As a BDC, Capital Southwest is required by law to distribute at least 90% of its taxable income to shareholders, a structure designed to provide retail investors access to private debt markets.
While the firm excludes direct oil and gas exploration, it actively targets the energy services sector, specifically focusing on equipment rental and consumable products. Analyzing historical dividend stability on ValueRay can help clarify how these sector allocations impact long-term shareholder yield.
Investment structures often include first and second lien debt, with equity components generally capped at 20% of the total transaction value. This diversified credit strategy aims to generate current income and capital appreciation through platform acquisitions, refinancings, and management buyouts.
- Floating rate loan portfolio benefits from sustained elevated benchmark interest rates
- Lower middle market credit performance dictates net asset value and dividend stability
- Expansion of asset management platform drives fee income and return on equity
- Portfolio concentration in industrial and business services influences credit loss provisions
- Equity co-investment exits provide potential for supplemental dividend payouts and capital appreciation
| Net Income: 113.0m TTM > 0 and > 6% of Revenue |
| FCF/TA: -0.03 > 0.02 and ΔFCF/TA 9.33 > 1.0 |
| NWC/Revenue: 29.11% < 20% (prev 40.01%; Δ -10.89% < -1%) |
| CFO/TA -0.03 > 3% & CFO -66.0m > Net Income 113.0m |
| Net Debt (1.10b) to EBITDA (144.5m): 7.62 < 3 |
| Current Ratio: error (cannot be calculated; needs correct Total Current Assets and Liabilities) |
| Outstanding Shares: last quarter (62.5m) vs 12m ago 22.01% < -2% |
| Gross Margin: 77.78% > 18% (prev 0.66%; Δ 7.71k% > 0.5%) |
| Asset Turnover: 11.20% > 50% (prev 9.16%; Δ 2.04% > 0%) |
| Interest Coverage Ratio: 2.06 > 6 (EBITDA TTM 144.5m / Interest Expense TTM 66.6m) |
| A: 0.03 (Total Current Assets 64.6m - Total Current Liabilities 0.0) / Total Assets 2.18b |
| B: -0.04 (Retained Earnings -79.0m / Total Assets 2.18b) |
| C: 0.07 (EBIT TTM 137.6m / Avg Total Assets 1.98b) |
| D: -0.05 (Book Value of Equity -63.9m / Total Liabilities 1.17b) |
| Altman-Z'' = 0.49 = B |
As of May 23, 2026, the stock is trading at USD 23.08 with a total of 565,496 shares traded.
Over the past week, the price has changed by -3.39%,
over one month by -2.86%,
over three months by +4.54% and
over the past year by +26.36%.
Capital Southwest has received a consensus analysts rating of 3.71. Therefore, it is recommended to hold CSWC.
- StrongBuy: 2
- Buy: 1
- Hold: 4
- Sell: 0
- StrongSell: 0
| Analysts Target Price | 24.9 | 7.9% |
P/E Forward = 10.6496
P/S = 6.222
P/B = 1.3853
P/EG = 12.5385
Revenue TTM = 222.0m USD
EBIT TTM = 137.6m USD
EBITDA TTM = 144.5m USD
Long Term Debt = unknown (none)
Short Term Debt = 224.2m USD (from shortTermDebt, two quarters ago)
Debt = 1.13b USD (from shortLongTermDebtTotal, last quarter)
Net Debt = 1.10b USD (calculated: Debt 1.13b - CCE 29.4m)
Enterprise Value = 2.55b USD (1.44b + Debt 1.13b - CCE 29.4m)
Interest Coverage Ratio = 2.06 (Ebit TTM 137.6m / Interest Expense TTM 66.6m)
EV/FCF = -38.41x (Enterprise Value 2.55b / FCF TTM -66.3m)
FCF Yield = -2.60% (FCF TTM -66.3m / Enterprise Value 2.55b)
FCF Margin = -29.85% (FCF TTM -66.3m / Revenue TTM 222.0m)
Net Margin = 50.89% (Net Income TTM 113.0m / Revenue TTM 222.0m)
Gross Margin = 77.78% ((Revenue TTM 222.0m - Cost of Revenue TTM 49.3m) / Revenue TTM)
Gross Margin QoQ = none% (prev 70.86%)
Tobins Q-Ratio = 1.17 (Enterprise Value 2.55b / Total Assets 2.18b)
Interest Expense / Debt = 5.89% (Interest Expense 66.6m / Debt 1.13b)
Taxrate = 6.06% (7.29m / 120.3m)
NOPAT = 129.2m (EBIT 137.6m * (1 - 6.06%))
Current Ratio = unknown (Total Current Assets 64.6m / Total Current Liabilities 0.0)
Debt / Equity = 1.12 (Debt 1.13b / totalStockholderEquity, last quarter 1.01b)
Debt / EBITDA = 7.62 (Net Debt 1.10b / EBITDA 144.5m)
Debt / FCF = -16.62 (negative FCF - burning cash) (Net Debt 1.10b / FCF TTM -66.3m)
Total Stockholder Equity = 967.5m (last 4 quarters mean from totalStockholderEquity)
RoA = 5.70% (Net Income 113.0m / Total Assets 2.18b)
RoE = 10.80% (Net Income TTM 113.0m / Total Stockholder Equity 1.05b)
RoCE = 6.32% (EBIT 137.6m / Capital Employed (Total Assets 2.18b - Current Liab 0.0))
RoIC = 6.40% (EBIT 137.6m / (Assets 2.18b - Curr.Liab 0.0 - Cash 29.4m))
WACC = 7.21% (E(1.44b)/V(2.58b) * Re(8.52%) + D(1.13b)/V(2.58b) * Rd(5.89%) * (1-Tc(0.06)))
Discount Rate = 8.52% (= CAPM, Blume Beta Adj.)
Shares (quarterly) Correlation: 82.22 | Cagr: 19.90%
[DCF] Fair Price = unknown (Cash Flow -66.3m)
EPS Correlation: -2.15 | EPS CAGR: -0.25% | SUE: 0.53 | # QB: 0
Revenue Correlation: 95.85 | Revenue CAGR: 22.17% | SUE: 0.65 | # QB: 0
EPS current Quarter (2026-06-30): EPS=0.54 | Chg30d=-6.29% | Revisions=-43% | Analysts=5
EPS next Quarter (2026-09-30): EPS=0.54 | Chg30d=-3.55% | Revisions=-33% | Analysts=5
EPS current Year (2027-03-31): EPS=2.18 | Chg30d=-3.79% | Revisions=-43% | GrowthEPS=-8.2% | GrowthRev=+9.4%
EPS next Year (2028-03-31): EPS=2.22 | Chg30d=N/A | Revisions=N/A | GrowthEPS=+1.9% | GrowthRev=+10.9%
[Analyst] Revisions Ratio: -43%