Capital Southwest Corporation (CSWC) — Dividend Yield, NAV & Valuation Analysis
CSWC · NASDAQ
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Overview
Capital Southwest Corporation is one of the longest-operating BDCs, with roots dating back to 1961. CSWC provides senior secured loans, mezzanine debt, and equity co-investments to lower middle-market companies. The company focuses on businesses with EBITDA between $3 million and $25 million. CSWC is known for its internally managed structure, which aligns management interests with shareholders and typically results in lower expense ratios.
Key Metrics
| Metric | Value |
|---|---|
| 1-Year Total Return | 13.5% |
| 3-Year Total Return | 36.8% |
| 5-Year Total Return | 54.5% |
| Expense Ratio | 6.5% |
| Leverage Ratio | 1.25x |
| Portfolio Companies | 70 |
| Total Assets | $1.8B |
Discount / Premium to NAV
| Stock Price | $24.58 |
| NAV per Share | $22.1 |
| Premium / (Discount) to NAV | 11.2% |
| Implied per-share NAV gap | $-2.48 |
The premium / discount to NAV compares the current stock price to the per-share net asset value of Capital Southwest Corporation's investment portfolio. A negative reading (a discount) means the market is pricing CSWC below the value of its underlying assets and is one of the most-watched valuation metrics for any BDC. A positive reading (a premium) means the market is paying a premium over the stated NAV, often reflecting confidence in future dividend coverage and portfolio credit quality. Capital Southwest Corporation currently trades at a 11.2% premium to NAV.
Investment Strategy
Capital Southwest Corporation focuses on senior secured loans, mezzanine debt, equity co-investments in the manufacturing, industrial, business services, healthcare sectors. The company targets lower middle-market companies and maintains a portfolio of 70 investments totaling $1.8B in assets.
Management
CEO: Henri J. O'Brea | Employees: 28
Suitability
CSWC is suitable for income-focused investors seeking quarterly dividend income with a 10.4% yield. The BDC's focus on senior secured loans provides portfolio characteristics. Investors should consider their risk tolerance and investment objectives before investing.