Capital Southwest Corp (CSWC) is a U.S.-based investment company that specializes in providing customized financing to middle market companies across various industries.

As a business development company, CSWC’s investment objective is to produce attractive risk-adjusted returns by generating current income from debt investments and capital appreciation from equity and equity related investments.

It focuses on providing flexible financing solutions through partnerships with business owners, management teams, and financial sponsors.

The company's portfolio may include senior debt, second lien, and subordinated debt, preferred stocks, common stocks, and warrants.nThe primary source company's revenue comprises interest and dividend income from investments made as well as management fees.

Capital Southwest Corporation was founded on April 19, 1961 and is based in Dallas, Texas.

Three key data points gauge Capital Southwest Corporation or any dividend paying firm. The key three are:

(1) Price

(2) Dividends

(3) Returns

Those three keys also best tell whether any company has made, is making, and will make money.

CSWC Price

Share price fell 9.6% over the past year from $23.29 to $21.05, as of Friday’s market close.

In the past 3 years the company’s share price has rarely been less than $16.70 nor more than $27.20. Its all-time high price of $28.41 was reached in October 2021.

If shares trade in the range of $20.00 to $28.00 this next year, the recent $21.05 share price might grow to $25.00. Of course, CSWC shares could also drop about the same $3.95 estimated amount, or more.

My $3.95 price upside estimate is based on the median of one year target price estimates from seven analysts tracking the stock for brokers.

CSWC Dividend

Capital Southwest has paid dividends since May 1985, becoming quarterly as of  November 2013. The company’s most recent Q dividend of $0.63 was declared October 28th to shareholders of record prior to December 13th, and the dividend is payable December 31st. A forward looking annual dividend of $2.52 yields 11.97% per Friday’s closing price.

CSWC Returns

Putting it all together, a $6.47 estimated annual gross gain per share shows up by adding Capital Southwest’s annual $2.52 dividend to the estimated price upside of $3.95, totals that $6.47 gross gain.

A little over $1000 buys 48 shares at Friday’s $21.05 share price.

A $10 broker fee (if charged), collected half at purchase and half at sale, might take about $0.21 per share out of the $6.47 gross-gain to give us a net gain of $6.26 X 48 shares = $300.48 for about a 30% estimated net gain on the year.

However, the $119.70 annual estimated dividend income from $1k invested in CSWC is 5.7 times more than the $21.05 single-share price. By these numbers, CSWC may be an ideal financial dividend dog.

Therefore, you may want to pounce on Capital Southwest.

It is a soon to be 64 year-old variable quarterly dividend paying business development company with a 40 year dividend record.

The exact track of Capital Southwest Corp future price and dividend will entirely be determined by market action and company finances.

Remember, the best measure of  stock value is through direct ownership of shares.

More By This Author:

Stock Analysis: Village Supermarket
Current Report: Mitsubishi Shokuhin
Current Report: Universal Corp