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Capital Southwest Corp goes by the ticker symbol CSWC and is a member of the financial services business sector as an asset management firm. This is my second report on Capital Southwest Corp for this Vista folio and I last discussed it on February 22nd.

Capital Southwest Corp is a US-based investment company that specializes in providing customized financing to middle-market companies across various industries. The company's investment objective 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 stock, and common stock and warrants. 

The primary source company's revenue comprises interest income and dividend income from investments made as well as management fees.

The firm has the flexibility to hold investments for a very long period in its portfolio companies. It may also invest through warrants. The firm prefers to take Board participation in its portfolio companies. 

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

Three key data points gauge dividend equities or funds like Capital Southwest Corp:

(1) Price

(2) Dividends

(3) Returns

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

CSWC Price

Capital Southwest's price per share was $24.61 as of Friday's market close. One year ago its price was $13.70. Thus, price per share grew over 79.5% in the past year as the market recovered from Covid doldrums. 

Should CSWC's stock trade in the range of $13 to $30.00 this next year, its recent $24.61 price might rise by $2.89 to reach $27.50 by June 21, 2022. My estimate corresponds to the median of annual price estimates from the eight analysts covering Capital Southwest Corp.

CSWC Dividends

Capital Southwest's most recently declared quarterly dividend payout of $0.43 is payable June 30th and equates to $1.72 annually which will yield 6.99% based on Friday's $24.61 price. CSWC has paid quarterly dividends increasing annually for 6 years.

CSWC Returns

Adding the $1.72 annual Capital Southwest Corp forward-looking dividend to my $2.89 price upside estimate shows a $4.61 potential gross gain, per share, to be reduced by any costs to trade CSWC. At Friday's $24.61 price per share, a little over $1000 would buy 41 shares.

A $10 broker fee (if charged) would be paid half at purchase and half at a sale and might cost us about $0.24 per share.

Subtract that maybe $0.24 brokerage cost from my estimated $4.61 gross gain per share results in a net gain of $4.37 X 41 shares = $179.17 for a 17.9% net gain on a $1,009.01 investment.

So it is that  Capital Southwest Corp shows a possible 17.9% net gain including a 6.99% forward estimated dividend yield. 

Over the next year at this time, a $1000 investment in CSWC would generate $69.90 in cash dividends. And a single share bought at Friday's closing price was $24.61! So, Capital Southwest Corp's share price is just lightly over one-third of the dividend income from $1K invested. Thus, according to dogcatcher preference, this is an opportune time to invest in CSWC shares.

All of the estimates above are speculation based on the past history of Capital Southwest Corp. Only time and money invested in this stock will determine its true worth.