Capital Southwest Stock Fair Value – Capital Southwest: A Buy for High Yield, Low Leverage and Low Expenses
January 7, 2024
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Capital Southwest ($NASDAQ:CSWC) Corporation (NYSE: CSWC) is a publicly-traded investment company specializing in providing financing to businesses in the lower middle market. The company has a long history of delivering reliable income and capital appreciation to its investors, and its low leverage, low expenses, and high yields make it an attractive buy for those seeking these benefits. The company has maintained a debt-to-equity ratio of less than three-to-one, which means that its assets are largely composed of equity investments rather than debt. This helps minimize risk and makes the company’s returns more predictable.
Additionally, the company’s low expenses help to maximize the return on its investments. Capital Southwest also offers high yields to its investors. This makes it an attractive option for investors looking for reliable income. All in all, Capital Southwest is an attractive buy for those seeking high yields, low leverage and low expenses. Its long history of delivering returns makes it a reliable choice for investors who want to generate income and capital appreciation without taking on too much risk.
Market Price
On Friday, CAPITAL SOUTHWEST stock opened at $24.9 and closed at $25.1, up by 1.4% from the previous closing price of $24.7. This increase in stock prices indicates investor confidence in the company’s ability to deliver on their promises of low leverage and low expenses. Their dividend yield is currently higher than the market average, making it a great option for investors looking for income without taking on too much risk. The company’s financials are strong, with a conservative debt-to-equity ratio that indicates low leverage.
Their expenses are low compared to other companies in the same industry and CAPITAL SOUTHWEST has a good track record of paying out dividends to its shareholders. This makes it an attractive option for risk-averse investors looking to maximize their returns while minimizing their exposure to risk. Its strong financials, combined with the steady increase in stock prices, are indicators of a robust future for the company. Live Quote…
About the Company
Income Snapshot
Below shows the total revenue, net income and net margin for Capital Southwest. More…
| Total Revenues | Net Income | Net Margin |
| 93.65 | 67.56 | 72.1% |
Cash Flow Snapshot
Below shows the cash from operations, investing and financing for Capital Southwest. More…
| Operations | Investing | Financing |
| -235.96 | -0.13 | 228.87 |
Balance Sheet Snapshot
Below shows the total assets, liabilities and book value per share for Capital Southwest. More…
| Total Assets | Total Liabilities | Book Value Per Share |
| 1.42k | 759.14 | 16.46 |
Key Ratios Snapshot
Some of the financial key ratios for Capital Southwest are shown below. More…
| 3Y Rev Growth | 3Y Operating Profit Growth | Operating Margin |
| 83.6% | – | – |
| FCF Margin | ROE | ROA |
| -252.1% | 6.8% | 3.1% |
Analysis – Capital Southwest Stock Fair Value
At GoodWhale, we performed an analysis of CAPITAL SOUTHWEST‘s wellbeing and found that its fair value of share is around $18.7. This is calculated using our proprietary Valuation Line. Currently, CAPITAL SOUTHWEST stock is traded at $25.1, this means that the stock is overvalued by 34.4%. We believe our analysis provides an insight into CAPITAL SOUTHWEST’s financial standing, and can help investors make better decisions while choosing to invest in this company. More…
Peers
The company’s competitors include Main Street Capital Corp, Fidus Investment Corp, and Apollo Investment Corp.
– Main Street Capital Corp ($NYSE:MAIN)
As of 2022, Main Street Capital Corporation has a market capitalization of $2.78 billion and a return on equity of 9.9%. The company is a business development company that provides long-term debt and equity capital to lower middle-market companies. Main Street’s investment objective is to achieve a high total return, primarily through significant capital appreciation and income from its portfolio investments. The company has invested in more than 400 companies since inception.
– Fidus Investment Corp ($NASDAQ:FDUS)
Fidus Investment Corporation is a publicly traded business development company primarily focused on providing tailored financing solutions to support the acquisition, recapitalization, and growth of middle-market companies. Fidus primarily invests in first and second lien loans, mezzanine debt, and equity securities.
As of 2022, Fidus Investment Corporation had a market cap of 460.64M and a return on equity of 13.01%. The company provides financing solutions to support the acquisition, recapitalization, and growth of middle-market companies. Fidus primarily invests in first and second lien loans, mezzanine debt, and equity securities.
Summary
CAPITAL SOUTHWEST is a publicly traded company providing access to capital for middle-market companies. Its investment strategy focuses on high yield, low leverage and expense ratios which make it an attractive buy for investors. It offers debt and equity capital, as well as mezzanine financing and venture capital solutions.
The company has a solid track record with its portfolio of investments delivering consistent returns, allowing investors to benefit from lower risk and volatility. The company also has the ability to quickly deploy capital to its target companies.
