Capital Southwest Corporation (SFW)
XDUS 
Summary
SFW Chart
I'm Buying Income Machines With 7-11% Yields
Income investing is attractive now as high-yield stocks offer cash flow and downside protection amid frothy growth stock valuations. I highlight two companies that carry competitive advantages and strong returns on invested capital. Both have strong balance sheets and are well-positioned to deliver potentially robust shareholder returns.
Capital Southwest: Strong Resilience Through Uncertainty
I maintain my buy rating on CSWC due to its attractive valuation, high-quality portfolio, and strong dividend coverage, despite recent price declines. CSWC's portfolio is well-diversified, focused on senior secured first lien debt, and benefits from high floating-rate exposure in a higher-rate environment. Dividend yield remains enticing at 12%, now paid monthly, with ample undistributed taxable income supporting continued stable payouts and supplemental dividends.
Capital Southwest Delivers Reliable Income With Built-In Downside Protection
Capital Southwest's fundamentals remain strong, despite a recent pullback, with a 12% dividend yield fully covered by sustainable earnings and a robust UTI buffer. The company's internally managed, lower middle market strategy offers high yields, diversification, and lower costs compared to larger BDC peers. Conservative leverage, strong liquidity, and disciplined underwriting position CSWC to weather macro risks and maintain its reliable dividend.
Capital Southwest Corporation Dividends
| CSWC In 1 month Announced | Other | $0.25 Per Share |
| CSWC In 3 weeks Announced | Monthly | $0.19 Per Share |
| CSWC 6 days ago Announced | Monthly | $0.19 Per Share |
| CSWC 1 month ago Paid | Quarterly | $0.64 Per Share |
| CSWC 4 months ago Paid | Quarterly | $0.64 Per Share |
Capital Southwest Corporation Earnings
| 6 Aug 2025 (In 2 weeks) Date | | 0.6 Cons. EPS | - EPS |
| 4 Aug 2025 (In 2 weeks) Date | | 0.6 Cons. EPS | - EPS |
| 4 Aug 2025 (In 2 weeks) Date | | 0.6 Cons. EPS | - EPS |
| 15 May 2025 Date | | 0.61 Cons. EPS | 0.54 EPS |
| 4 Feb 2025 Date | | 0.64 Cons. EPS | 0.63 EPS |
| CSWC In 1 month Announced | Other | $0.25 Per Share |
| CSWC In 3 weeks Announced | Monthly | $0.19 Per Share |
| CSWC 6 days ago Announced | Monthly | $0.19 Per Share |
| CSWC 1 month ago Paid | Quarterly | $0.64 Per Share |
| CSWC 4 months ago Paid | Quarterly | $0.64 Per Share |
| 6 Aug 2025 (In 2 weeks) Date | | 0.6 Cons. EPS | - EPS |
| 4 Aug 2025 (In 2 weeks) Date | | 0.6 Cons. EPS | - EPS |
| 4 Aug 2025 (In 2 weeks) Date | | 0.6 Cons. EPS | - EPS |
| 15 May 2025 Date | | 0.61 Cons. EPS | 0.54 EPS |
| 4 Feb 2025 Date | | 0.64 Cons. EPS | 0.63 EPS |
Capital Southwest Corporation (SFW) FAQ
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Capital Southwest Corporation Profile
| Asset Management Industry | Financial Services Sector | Michael Scott Sarner CPA, CPA CEO | XDUS Exchange | US1405011073 ISIN |
| US Country | 27 Employees | 15 Sep 2025 Last Dividend | 1 Oct 2015 Last Split | 27 Mar 1990 IPO Date |
Overview
Capital Southwest Corporation is an established business development company founded on April 19, 1961, and based in Dallas, Texas. The company specializes in credit and private equity, along with venture capital investments. It primarily targets middle market companies for investments in various forms such as mezzanine, later stage, mature, late venture, emerging growth, buyouts, industry consolidation, recapitalizations, and growth capital. Capital Southwest has a policy of not investing in startups, publicly traded companies, real estate developments, project finance opportunities, oil and gas exploration businesses, troubled companies, turnarounds, and companies experiencing significant departures in senior management. Furthermore, it focuses on making long-term investments, with flexibility in holding periods, and prefers to take Board participation in its portfolio companies to influence growth and operational direction effectively.
Products and Services
Capital Southwest Corporation offers a wide range of financial products and services targeting various sectors through tailored investment structures. Below are the key offerings:
- Investment Types: Catering to the lower and upper middle market, Capital Southwest provides growth financing, bolt-on acquisitions, new platform acquisitions, refinancing, dividend recapitalizations, sponsor-led buyouts, and management buyouts.
- Investment Structures: The firm employs diverse structures for its investments, including Unitranche debt, subordinated debt, senior debt, first and second lien debt, and preferred and common equity. These structures are designed to meet the specific needs of the companies they invest in.
- Equity Co-Investments: Alongside debt investments, Capital Southwest makes equity co-investments up to 20% of the total deal size but only in non-control situations to support companies' growth and operational needs further.
- Industry Focus: While industry agnostic, Capital Southwest has a preference for investing in industrial manufacturing and services, value-added distribution, healthcare products and services, business services, specialty chemicals, food and beverage, tech-enabled services, SaaS models, energy services and products, industrial technologies, and specialty chemicals and products.
- Geographic Focus: The firm primarily seeks investment opportunities within the United States and North America, ensuring a broad range of companies can access the capital they need for growth and expansion.
- Investment Size and Criteria: Investments range from $5 million to $25 million for direct investments in companies with minimum EBITDAs between $3 million and $25 million. In the upper middle market segment, Capital Southwest participates in syndicated first and second lien term loans, with commitments ranging from $5 million to $15 million and specific financial criteria including EBITDA sizes and closing leverage ratios.
- Board Participation: Capital Southwest prefers to engage in Board participation with its portfolio companies, allowing it to contribute to strategic decisions and growth plans effectively.
Contact Information
