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 232 industry peers in the Capital Markets industry. Both the profitability and the financial health of CSWC get a neutral evaluation. Nothing too spectacular is happening here. CSWC has a correct valuation and a medium 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 each of the past 5 years.
In the past 5 years CSWC always reported negative operating cash flow.
1.2 Ratios
The Return On Assets of CSWC (3.75%) is better than 60.78% of its industry peers.
The Return On Equity of CSWC (7.98%) is comparable to the rest of the industry.
With a decent Return On Invested Capital value of 5.08%, CSWC is doing good in the industry, outperforming 63.36% of the companies in the same industry.
Measured over the past 3 years, the Average Return On Invested Capital for CSWC is below the industry average of 7.24%.
The 3 year average ROIC (5.02%) for CSWC is below the current ROIC(5.08%), indicating increased profibility in the last year.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 3.75% | ||
| ROE | 7.98% | ||
| ROIC | 5.08% |
ROA(3y)3.91%
ROA(5y)4.61%
ROE(3y)8.21%
ROE(5y)9.99%
ROIC(3y)5.02%
ROIC(5y)4.45%
1.3 Margins
CSWC has a better Profit Margin (34.51%) than 77.59% of its industry peers.
In the last couple of years the Profit Margin of CSWC has declined.
Looking at the Operating Margin, with a value of 58.92%, CSWC belongs to the top of the industry, outperforming 94.83% of the companies in the same industry.
In the last couple of years the Operating Margin of CSWC has grown nicely.
CSWC's Gross Margin of 73.12% is fine compared to the rest of the industry. CSWC outperforms 77.59% 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 | 58.92% | ||
| PM (TTM) | 34.51% | ||
| GM | 73.12% |
OM growth 3Y3.8%
OM growth 5Y3.81%
PM growth 3Y-12.81%
PM growth 5YN/A
GM growth 3Y-1.19%
GM growth 5Y-0.38%
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.
CSWC has a worse debt/assets ratio than last year.
2.2 Solvency
CSWC has an Altman-Z score of 0.95. This is a bad value and indicates that CSWC is not financially healthy and even has some risk of bankruptcy.
The Altman-Z score of CSWC (0.95) is comparable to the rest of the industry.
CSWC has a Debt/Equity ratio of 1.08. This is a high value indicating a heavy dependency on external financing.
CSWC has a Debt to Equity ratio of 1.08. This is comparable to the rest of the industry: CSWC outperforms 46.98% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 1.08 | ||
| Debt/FCF | N/A | ||
| Altman-Z | 0.95 |
ROIC/WACCN/A
WACCN/A
2.3 Liquidity
A Current Ratio of 5.19 indicates that CSWC has no problem at all paying its short term obligations.
CSWC has a Current ratio of 5.19. This is amongst the best in the industry. CSWC outperforms 87.07% of its industry peers.
CSWC has a Quick Ratio of 5.19. This indicates that CSWC is financially healthy and has no problem in meeting its short term obligations.
CSWC has a better Quick ratio (5.19) than 87.07% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 5.19 | ||
| Quick Ratio | 5.19 |
3. Growth
3.1 Past
CSWC shows a slight negative growth in Earnings Per Share. In the last year, the EPS has decreased by -8.89%.
Measured over the past years, CSWC shows a quite strong growth in Earnings Per Share. The EPS has been growing by 9.26% on average per year.
Looking at the last year, CSWC shows a quite strong growth in Revenue. The Revenue has grown by 14.77% in the last year.
The Revenue has been growing by 26.95% on average over the past years. This is a very strong growth!
EPS 1Y (TTM)-8.89%
EPS 3Y9.57%
EPS 5Y9.26%
EPS Q2Q%-18.18%
Revenue 1Y (TTM)14.77%
Revenue growth 3Y35.49%
Revenue growth 5Y26.95%
Sales Q2Q%12.87%
3.2 Future
The Earnings Per Share is expected to decrease by -0.24% on average over the next years.
The Revenue is expected to grow by 12.44% on average over the next years. This is quite good.
EPS Next Y1.11%
EPS Next 2Y-0.24%
EPS Next 3YN/A
EPS Next 5YN/A
Revenue Next Year10.35%
Revenue Next 2Y12.44%
Revenue Next 3YN/A
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 reasonably with a Price/Earnings ratio of 8.46.
CSWC's Price/Earnings ratio is rather cheap when compared to the industry. CSWC is cheaper than 80.17% of the companies in the same industry.
Compared to an average S&P500 Price/Earnings ratio of 26.25, CSWC is valued rather cheaply.
With a Price/Forward Earnings ratio of 8.37, the valuation of CSWC can be described as very reasonable.
83.19% of the companies in the same industry are more expensive than CSWC, based on the Price/Forward Earnings ratio.
CSWC is valuated cheaply when we compare the Price/Forward Earnings ratio to 22.15, which is the current average of the S&P500 Index.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 8.46 | ||
| Fwd PE | 8.37 |
4.2 Price Multiples
Based on the Enterprise Value to EBITDA ratio, CSWC is valued a bit cheaper than 77.16% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | N/A | ||
| EV/EBITDA | 16.08 |
4.3 Compensation for Growth
The high PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates CSWC does not grow enough to justify the current Price/Earnings ratio.
The decent profitability rating of CSWC may justify a higher PE ratio.
PEG (NY)7.61
PEG (5Y)0.91
EPS Next 2Y-0.24%
EPS Next 3YN/A
5. Dividend
5.1 Amount
With a Yearly Dividend Yield of 11.18%, CSWC is a good candidate for dividend investing.
CSWC's Dividend Yield is a higher than the industry average which is at 8.14.
CSWC's Dividend Yield is rather good when compared to the S&P500 average which is at 2.38.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 11.18% |
5.2 History
The dividend of CSWC decreases each year by -2.03%.
CSWC has paid a dividend for at least 10 years, which is a reliable track record.
CSWC has decreased its dividend in the last 3 years.
Dividend Growth(5Y)-2.03%
Div Incr Years2
Div Non Decr Years2
5.3 Sustainability
177.56% of the earnings are spent on dividend by CSWC. This is not a sustainable payout ratio.
The Dividend Rate of CSWC has been decling, while earnings will also be declining. This means the current dividend is most likely not sustainable.
DP177.56%
EPS Next 2Y-0.24%
EPS Next 3YN/A
20.82
+0.07 (+0.34%)
Chartmill FA Rating
GICS SectorFinancials
GICS IndustryGroupFinancial Services
GICS IndustryCapital Markets
Earnings (Last)
Earnings (Next)
Inst Owners31.5%
Inst Owner Change16.2%
Ins Owners4.14%
Ins Owner Change0.03%
Market Cap1.12B
Analysts77.14
Price Target24.04 (15.47%)
Short Float %4.34%
Short Ratio3.3
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 11.18% |
Yearly Dividend2.56
Dividend Growth(5Y)-2.03%
DP177.56%
Div Incr Years2
Div Non Decr Years2
Ex-Date
Surprises & Revisions
EPS beat(2)0
Avg EPS beat(2)-6.57%
Min EPS beat(2)-12.51%
Max EPS beat(2)-0.63%
EPS beat(4)0
Avg EPS beat(4)-4.52%
Min EPS beat(4)-12.51%
Max EPS beat(4)-0.58%
EPS beat(8)2
Avg EPS beat(8)-1.6%
EPS beat(12)5
Avg EPS beat(12)-0.21%
EPS beat(16)7
Avg EPS beat(16)-0.19%
Revenue beat(2)1
Avg Revenue beat(2)-0.47%
Min Revenue beat(2)-2.53%
Max Revenue beat(2)1.58%
Revenue beat(4)2
Avg Revenue beat(4)-0.41%
Min Revenue beat(4)-3.16%
Max Revenue beat(4)2.48%
Revenue beat(8)5
Avg Revenue beat(8)0.72%
Revenue beat(12)7
Avg Revenue beat(12)0.13%
Revenue beat(16)9
Avg Revenue beat(16)0.24%
PT rev (1m)0%
PT rev (3m)-1.79%
EPS NQ rev (1m)-1.87%
EPS NQ rev (3m)-1.87%
EPS NY rev (1m)0%
EPS NY rev (3m)0%
Revenue NQ rev (1m)0.37%
Revenue NQ rev (3m)0.37%
Revenue NY rev (1m)0%
Revenue NY rev (3m)0.3%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 8.46 | ||
| Fwd PE | 8.37 | ||
| P/S | 5.47 | ||
| P/FCF | N/A | ||
| P/OCF | N/A | ||
| P/B | 1.27 | ||
| P/tB | 1.27 | ||
| EV/EBITDA | 16.08 |
EPS(TTM)2.46
EY11.82%
EPS(NY)2.49
Fwd EY11.95%
FCF(TTM)-4.08
FCFYN/A
OCF(TTM)-4.05
OCFYN/A
SpS3.81
BVpS16.45
TBVpS16.45
PEG (NY)7.61
PEG (5Y)0.91
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 3.75% | ||
| ROE | 7.98% | ||
| ROCE | 6.43% | ||
| ROIC | 5.08% | ||
| ROICexc | 5.2% | ||
| ROICexgc | 5.33% | ||
| OM | 58.92% | ||
| PM (TTM) | 34.51% | ||
| GM | 73.12% | ||
| FCFM | N/A |
ROA(3y)3.91%
ROA(5y)4.61%
ROE(3y)8.21%
ROE(5y)9.99%
ROIC(3y)5.02%
ROIC(5y)4.45%
ROICexc(3y)5.13%
ROICexc(5y)4.56%
ROICexgc(3y)5.25%
ROICexgc(5y)4.67%
ROCE(3y)6.36%
ROCE(5y)5.64%
ROICexcg growth 3Y13.4%
ROICexcg growth 5Y4.23%
ROICexc growth 3Y13.36%
ROICexc growth 5Y4.27%
OM growth 3Y3.8%
OM growth 5Y3.81%
PM growth 3Y-12.81%
PM growth 5YN/A
GM growth 3Y-1.19%
GM growth 5Y-0.38%
F-Score1
Asset Turnover0.11
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 1.08 | ||
| Debt/FCF | N/A | ||
| Debt/EBITDA | 7.57 | ||
| Cap/Depr | 28.41% | ||
| Cap/Sales | 0.81% | ||
| Interest Coverage | 2.59 | ||
| Cash Conversion | N/A | ||
| Profit Quality | N/A | ||
| Current Ratio | 5.19 | ||
| Quick Ratio | 5.19 | ||
| Altman-Z | 0.95 |
F-Score1
WACCN/A
ROIC/WACCN/A
Cap/Depr(3y)13.14%
Cap/Depr(5y)N/A
Cap/Sales(3y)0.36%
Cap/Sales(5y)N/A
Profit Quality(3y)N/A
Profit Quality(5y)N/A
High Growth Momentum
Growth
EPS 1Y (TTM)-8.89%
EPS 3Y9.57%
EPS 5Y9.26%
EPS Q2Q%-18.18%
EPS Next Y1.11%
EPS Next 2Y-0.24%
EPS Next 3YN/A
EPS Next 5YN/A
Revenue 1Y (TTM)14.77%
Revenue growth 3Y35.49%
Revenue growth 5Y26.95%
Sales Q2Q%12.87%
Revenue Next Year10.35%
Revenue Next 2Y12.44%
Revenue Next 3YN/A
Revenue Next 5YN/A
EBIT growth 1Y8.56%
EBIT growth 3Y40.64%
EBIT growth 5Y31.79%
EBIT Next YearN/A
EBIT Next 3YN/A
EBIT Next 5YN/A
FCF growth 1Y-16.13%
FCF growth 3YN/A
FCF growth 5YN/A
OCF growth 1Y-15.26%
OCF growth 3YN/A
OCF growth 5YN/A