CAPITAL SOUTHWEST CORP (CSWC) Stock Fundamental Analysis
NASDAQ:CSWC - Nasdaq - US1405011073 - Common Stock - Currency: USD
We assign a fundamental rating of 5 out of 10 to CSWC. CSWC was compared to 230 industry peers in the Capital Markets industry. CSWC has an average financial health and profitability rating. CSWC is not valued too expensively and it also shows a decent growth rate.
1. Profitability
1.1 Basic Checks
In the past year CSWC was profitable.
CSWC had a negative operating cash flow in the past year.
CSWC had positive earnings in 4 of the past 5 years.
In the past 5 years CSWC always reported negative operating cash flow.
1.2 Ratios
CSWC has a Return On Assets of 3.71%. This is comparable to the rest of the industry: CSWC outperforms 57.83% of its industry peers.
CSWC has a Return On Equity of 8.00%. This is comparable to the rest of the industry: CSWC outperforms 43.91% of its industry peers.
CSWC has a better Return On Invested Capital (5.40%) than 70.00% of its industry peers.
Measured over the past 3 years, the Average Return On Invested Capital for CSWC is below the industry average of 7.10%.
The 3 year average ROIC (4.51%) for CSWC is below the current ROIC(5.40%), indicating increased profibility in the last year.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 3.71% | ||
| ROE | 8% | ||
| ROIC | 5.4% |
ROA(3y)4.13%
ROA(5y)3.09%
ROE(3y)8.94%
ROE(5y)6.74%
ROIC(3y)4.51%
ROIC(5y)4.26%
1.3 Margins
Looking at the Profit Margin, with a value of 33.49%, CSWC is in the better half of the industry, outperforming 74.35% of the companies in the same industry.
CSWC's Profit Margin has declined in the last couple of years.
CSWC has a better Operating Margin (61.35%) than 95.65% of its industry peers.
CSWC's Operating Margin has improved in the last couple of years.
CSWC's Gross Margin of 74.20% is amongst the best of the industry. CSWC outperforms 80.87% of its industry peers.
In the last couple of years the Gross Margin of CSWC has remained more or less at the same level.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 61.35% | ||
| PM (TTM) | 33.49% | ||
| GM | 74.2% |
OM growth 3Y7.54%
OM growth 5Y5.44%
PM growth 3Y-14.44%
PM growth 5Y-6%
GM growth 3Y1.01%
GM growth 5Y-0.18%
2. Health
2.1 Basic Checks
CSWC has more shares outstanding than it did 1 year ago.
The number of shares outstanding for CSWC has been increased compared to 5 years ago.
Compared to 1 year ago, CSWC has an improved debt to assets ratio.
2.2 Solvency
Based on the Altman-Z score of 0.94, we must say that CSWC is in the distress zone and has some risk of bankruptcy.
Looking at the Altman-Z score, with a value of 0.94, CSWC is in line with its industry, outperforming 51.30% of the companies in the same industry.
A Debt/Equity ratio of 1.11 is on the high side and indicates that CSWC has dependencies on debt financing.
CSWC's Debt to Equity ratio of 1.11 is in line compared to the rest of the industry. CSWC outperforms 48.26% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 1.11 | ||
| Debt/FCF | N/A | ||
| Altman-Z | 0.94 |
ROIC/WACCN/A
WACCN/A
2.3 Liquidity
CSWC has a Current Ratio of 5.48. This indicates that CSWC is financially healthy and has no problem in meeting its short term obligations.
CSWC has a Current ratio of 5.48. This is amongst the best in the industry. CSWC outperforms 88.26% of its industry peers.
CSWC has a Quick Ratio of 5.48. This indicates that CSWC is financially healthy and has no problem in meeting its short term obligations.
With an excellent Quick ratio value of 5.48, CSWC belongs to the best of the industry, outperforming 88.26% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 5.48 | ||
| Quick Ratio | 5.48 |
3. Growth
3.1 Past
The earnings per share for CSWC have decreased by -4.09% in the last year.
CSWC shows quite a strong growth in Earnings Per Share. Measured over the last years, the EPS has been growing by 13.71% yearly.
CSWC shows quite a strong growth in Revenue. In the last year, the Revenue has grown by 17.51%.
CSWC shows a strong growth in Revenue. Measured over the last years, the Revenue has been growing by 27.97% yearly.
EPS 1Y (TTM)-4.09%
EPS 3Y17.37%
EPS 5Y13.71%
EPS Q2Q%-10%
Revenue 1Y (TTM)17.51%
Revenue growth 3Y37.78%
Revenue growth 5Y27.97%
Sales Q2Q%7.02%
3.2 Future
Based on estimates for the next years, CSWC will show a decrease in Earnings Per Share. The EPS will decrease by -3.21% on average per year.
CSWC is expected to show quite a strong growth in Revenue. In the coming years, the Revenue will grow by 13.48% yearly.
EPS Next Y-4.15%
EPS Next 2Y-4.02%
EPS Next 3Y-3.21%
EPS Next 5YN/A
Revenue Next Year15.61%
Revenue Next 2Y12.95%
Revenue Next 3Y13.48%
Revenue Next 5YN/A
3.3 Evolution
When comparing the EPS growth rate of the last years to the growth rate of the upcoming years, we see that the growth is decreasing.
Although the future Revenue growth is still strong, it is not able to hold up the even more excellent growth rate of the past years.
4. Valuation
4.1 Price/Earnings Ratio
CSWC is valuated cheaply with a Price/Earnings ratio of 7.95.
Compared to the rest of the industry, the Price/Earnings ratio of CSWC indicates a rather cheap valuation: CSWC is cheaper than 80.87% of the companies listed in the same industry.
When comparing the Price/Earnings ratio of CSWC to the average of the S&P500 Index (28.22), we can say CSWC is valued rather cheaply.
With a Price/Forward Earnings ratio of 8.25, the valuation of CSWC can be described as very reasonable.
Based on the Price/Forward Earnings ratio, CSWC is valued a bit cheaper than 79.57% of the companies in the same industry.
The average S&P500 Price/Forward Earnings ratio is at 20.86. CSWC is valued rather cheaply when compared to this.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 7.95 | ||
| Fwd PE | 8.25 |
4.2 Price Multiples
Based on the Enterprise Value to EBITDA ratio, CSWC is valued a bit cheaper than 79.57% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | N/A | ||
| EV/EBITDA | 15.12 |
4.3 Compensation for Growth
A cheap valuation may be justified as CSWC's earnings are expected to decrease with -3.21% in the coming years.
PEG (NY)N/A
PEG (5Y)0.58
EPS Next 2Y-4.02%
EPS Next 3Y-3.21%
5. Dividend
5.1 Amount
With a Yearly Dividend Yield of 11.52%, CSWC is a good candidate for dividend investing.
Compared to an average industry Dividend Yield of 8.37, CSWC pays a bit more dividend than its industry peers.
CSWC's Dividend Yield is rather good when compared to the S&P500 average which is at 2.44.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 11.52% |
5.2 History
The dividend of CSWC has a limited annual growth rate of 0.11%.
CSWC has been paying a dividend for at least 10 years, so it has a reliable track record.
CSWC has decreased its dividend in the last 3 years.
Dividend Growth(5Y)0.11%
Div Incr Years2
Div Non Decr Years2
5.3 Sustainability
180.48% of the earnings are spent on dividend by CSWC. This is not a sustainable payout ratio.
The Dividend Rate of CSWC has been growing, while earnings will be declining. This means the dividend growth is most likely not sustainable.
DP180.48%
EPS Next 2Y-4.02%
EPS Next 3Y-3.21%
20.51
+0.37 (+1.84%)
Chartmill FA Rating
GICS SectorFinancials
GICS IndustryGroupFinancial Services
GICS IndustryCapital Markets
Earnings (Last)
Earnings (Next)
Inst Owners31.5%
Inst Owner Change6.35%
Ins Owners4.14%
Ins Owner Change0.04%
Market Cap1.04B
Analysts77.14
Price Target24.04 (17.21%)
Short Float %4.63%
Short Ratio3.31
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 11.52% |
Yearly Dividend2.54
Dividend Growth(5Y)0.11%
DP180.48%
Div Incr Years2
Div Non Decr Years2
Ex-Date
Surprises & Revisions
EPS beat(2)0
Avg EPS beat(2)-0.61%
Min EPS beat(2)-0.63%
Max EPS beat(2)-0.58%
EPS beat(4)0
Avg EPS beat(4)-1.75%
Min EPS beat(4)-4.35%
Max EPS beat(4)-0.58%
EPS beat(8)3
Avg EPS beat(8)0.42%
EPS beat(12)6
Avg EPS beat(12)0.95%
EPS beat(16)7
Avg EPS beat(16)-0.15%
Revenue beat(2)1
Avg Revenue beat(2)-0.79%
Min Revenue beat(2)-3.16%
Max Revenue beat(2)1.58%
Revenue beat(4)2
Avg Revenue beat(4)0.16%
Min Revenue beat(4)-3.16%
Max Revenue beat(4)2.48%
Revenue beat(8)5
Avg Revenue beat(8)-0.28%
Revenue beat(12)7
Avg Revenue beat(12)-0.01%
Revenue beat(16)9
Avg Revenue beat(16)0.13%
PT rev (1m)-1.79%
PT rev (3m)-6.65%
EPS NQ rev (1m)0%
EPS NQ rev (3m)-4.23%
EPS NY rev (1m)0%
EPS NY rev (3m)1.05%
Revenue NQ rev (1m)-0.35%
Revenue NQ rev (3m)0.86%
Revenue NY rev (1m)0.17%
Revenue NY rev (3m)1.3%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 7.95 | ||
| Fwd PE | 8.25 | ||
| P/S | 5.23 | ||
| P/FCF | N/A | ||
| P/OCF | N/A | ||
| P/B | 1.25 | ||
| P/tB | 1.25 | ||
| EV/EBITDA | 15.12 |
EPS(TTM)2.58
EY12.58%
EPS(NY)2.49
Fwd EY12.13%
FCF(TTM)-5.18
FCFYN/A
OCF(TTM)-5.15
OCFYN/A
SpS3.92
BVpS16.42
TBVpS16.42
PEG (NY)N/A
PEG (5Y)0.58
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 3.71% | ||
| ROE | 8% | ||
| ROCE | 6.83% | ||
| ROIC | 5.4% | ||
| ROICexc | 5.51% | ||
| ROICexgc | 5.65% | ||
| OM | 61.35% | ||
| PM (TTM) | 33.49% | ||
| GM | 74.2% | ||
| FCFM | N/A |
ROA(3y)4.13%
ROA(5y)3.09%
ROE(3y)8.94%
ROE(5y)6.74%
ROIC(3y)4.51%
ROIC(5y)4.26%
ROICexc(3y)4.59%
ROICexc(5y)4.36%
ROICexgc(3y)4.69%
ROICexgc(5y)4.47%
ROCE(3y)5.7%
ROCE(5y)5.4%
ROICexcg growth 3Y14.66%
ROICexcg growth 5Y9.62%
ROICexc growth 3Y14.47%
ROICexc growth 5Y9.65%
OM growth 3Y7.54%
OM growth 5Y5.44%
PM growth 3Y-14.44%
PM growth 5Y-6%
GM growth 3Y1.01%
GM growth 5Y-0.18%
F-Score1
Asset Turnover0.11
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 1.11 | ||
| Debt/FCF | N/A | ||
| Debt/EBITDA | 7.24 | ||
| Cap/Depr | 23.84% | ||
| Cap/Sales | 0.64% | ||
| Interest Coverage | 2.75 | ||
| Cash Conversion | N/A | ||
| Profit Quality | N/A | ||
| Current Ratio | 5.48 | ||
| Quick Ratio | 5.48 | ||
| Altman-Z | 0.94 |
F-Score1
WACCN/A
ROIC/WACCN/A
Cap/Depr(3y)33.98%
Cap/Depr(5y)N/A
Cap/Sales(3y)0.9%
Cap/Sales(5y)N/A
Profit Quality(3y)N/A
Profit Quality(5y)N/A
High Growth Momentum
Growth
EPS 1Y (TTM)-4.09%
EPS 3Y17.37%
EPS 5Y13.71%
EPS Q2Q%-10%
EPS Next Y-4.15%
EPS Next 2Y-4.02%
EPS Next 3Y-3.21%
EPS Next 5YN/A
Revenue 1Y (TTM)17.51%
Revenue growth 3Y37.78%
Revenue growth 5Y27.97%
Sales Q2Q%7.02%
Revenue Next Year15.61%
Revenue Next 2Y12.95%
Revenue Next 3Y13.48%
Revenue Next 5YN/A
EBIT growth 1Y17.15%
EBIT growth 3Y48.18%
EBIT growth 5Y34.94%
EBIT Next YearN/A
EBIT Next 3YN/A
EBIT Next 5YN/A
FCF growth 1Y-9.4%
FCF growth 3YN/A
FCF growth 5YN/A
OCF growth 1Y-9.87%
OCF growth 3YN/A
OCF growth 5YN/A