Capital Southwest Corp (CSWC)

Price$24.58Cached quoteAs of 2026-09-05 06:03 UTC

AI: Fair-priced

Price checkThe shares look fairly priced: rich versus assets, but supported by income.

Shares trade at about 1.46 times June net asset value of $16.61 and 10.4 times annualized quarterly net investment income of $2.32. Net asset value means portfolio assets minus liabilities; net investment income is lending income after operating and borrowing costs. The regular payout produces roughly a 9.6% annual yield. That combination supports Fair-priced: the income return is attractive, but buyers pay a large asset premium and assume credit losses remain low.

Big pictureLending income is growing, but the full dividend currently needs accumulated reserves.

Annual revenue rose 13.5% to $232.1 million, while net income increased to $113.0 million from $70.5 million. Portfolio gains and losses make net income uneven, so lending income is more useful: June-quarter net investment income was $0.58 a share after tax, matching the regular dividend but not the $0.64 total payout. Undistributed taxable income of $0.87 a share provides a cushion. Negative operating cash flow mainly reflects new loans being classified as operating outflows, rather than ordinary business losses.

Business strengthCredit protection is strong today, though leverage makes any downturn more painful.

At June 30, the $2.2 billion portfolio was 99% first-lien debt, meaning CSWC generally gets repaid before junior lenders. Loans not currently paying interest were only 1.1% of portfolio value, although their $65.7 million cost versus $23.4 million fair value shows real damage already recognized. Regulatory debt equaled $0.91 per equity dollar, while cash and unused credit lines totaled about $375 million. New loans averaged 29% of borrower value, leaving a cushion, but recession-driven defaults could still reduce assets and dividend income.

What could change the storyAbove-asset-value share sales can create value, but growing dilution raises the performance hurdle.

Outstanding shares rose 20% from 52.9 million in March 2025 to 63.7 million by July 30, 2026. The dilution has so far been constructive: June-quarter sales of 2.7 million shares occurred at 141% of prevailing net asset value, raised $63.6 million, and added about $0.28 per share to asset value. Authorization now permits 135 million shares. The bull case needs continued sales above asset value and low missed payments. Rising credit losses or lower floating-rate loan income would weaken per-share returns.

AI: News

Quarterly Income Held UpQuarterly income held steady while portfolio losses slightly reduced value per share.

On August 3, Capital Southwest reported $61.0 million of investment income and $35.7 million of net investment income, or $0.58 a share, for the quarter ended June 30. The portfolio reached $2.2 billion, but $10.9 million of investment losses lowered net asset value to $16.61 from $16.69. Shares gained 3.3% in the next session on elevated volume. The timing suggests a favorable reading, but does not prove the results caused the move.

Dividend Held SteadyThe board preserved the high payout, although regular income coverage remains tight.

On August 27, the board declared a $0.58 regular quarterly dividend, paid in three monthly installments, plus a $0.06 supplemental payment for December. The unchanged $0.64 total supports the income case, but the latest quarter’s $0.58 of net investment income covered only the regular portion. The supplemental amount therefore relies partly on accumulated taxable income and future gains. Shares rose 0.6% that day, though timing alone cannot attribute the move to the dividend.

More Shares AuthorizedShareholders approved far more issuance capacity, supporting growth while increasing future dilution risk.

On September 1, shareholders increased authorized common shares from 75 million to 135 million. About 63.7 million were outstanding in late July, so the previous limit was becoming restrictive. Additional shares can fund loans and improve asset value per share when issued above asset value, as recent sales were. They can dilute income and voting power if issued poorly. Shares fell 2.4% on heavy volume that session, but the announcement cannot be isolated as the sole cause.

Long-Term Funding ExpandedNew long-term borrowing improved liquidity and maturity protection, but raised the fixed interest burden.

On September 2, CSWC expanded its main credit facility from $510 million to $595 million, lowered the lending margin from 2.15% to 2.00%, and extended final maturity to September 2031. On September 10, it priced $350 million of notes carrying 6.75% interest and a 6.994% yield to maturity, mainly to repay revolving debt. These actions reduce near-term refinancing pressure and support portfolio growth, while requiring enough loan income to cover the new fixed financing cost.

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Financial statements

	2026	2025	2024	2023	2022	2021	2020	2019	2018	2017	2012	2011	2010	2009
Revenue	$232.1M	$204.4M	$178.1M	$119.3M	$82.2M	$68.1M	—	—	—	—	$10.8M	$9.3M	$7.6M	$6.1M
Operating expenses	$31.1M	$29.4M	$24.5M	$21.4M	—	—	—	—	—	—	$8.3M	$6.7M	$5.6M	$3.9M
Net income	$113.0M	$70.5M	$83.4M	$33.1M	$42.8M	$50.9M	—	—	—	—	—	—	—	—
Net profit margin	48.68%	34.51%	46.81%	27.74%	52.08%	74.76%	—	—	—	—	—	—	—	—
Basic EPSper basic share	$1.98	$1.47	$2.05	$2.29	$1.87	$1.66	—	—	—	—	—	—	—	—
Diluted EPSper diluted share	$1.90	$1.47	$2.05	$2.29	$1.87	$1.66	—	—	—	—	—	—	—	—

Review official source filings ↗

Owners

Reported shareholders

Reference date Jun 30, 2026

2.40%of listed shares

VAN ECK ASSOCIATES CORP1.53M shares · Jun 30, 2026

View holders

Top 20 reported holders of CSWC
Holder	% owned
VAN ECK ASSOCIATES CORP	2.40%1.53M shares
UBS Group AG	1.91%1.22M shares
TWO SIGMA INVESTMENTS, LP	1.85%1.18M shares
Sound Income Strategies, LLC	1.47%934.32K shares
SANDERS MORRIS HARRIS LLC	1.19%759.99K shares
Thomas William R III	≈0.94%596.62K shares
Sarner Michael Scott	≈0.92%587.68K shares
Empowered Funds, LLC	0.82%525.7K shares
Empirical Finance, LLC	0.82%525.5K shares
Legal & General Group Plc	0.78%499.72K shares
Cetera Investment Advisers	0.77%490.93K shares
Muzinich & Co., Inc.	0.68%435.91K shares
ENVESTNET ASSET MANAGEMENT INC	0.66%417.57K shares
LPL Financial LLC	0.63%402.59K shares
Weinstein Joshua S.	≈0.60%380.59K shares
FRANKLIN RESOURCES INC	0.60%379.69K shares
Melia Wealth LLC	0.59%377.76K shares
Columbus Macro, LLC	0.59%374.87K shares
TECTONIC ADVISORS LLC	0.56%355.37K shares
BlackRock, Inc.	0.47%300.38K shares

Percentages use 63.73M shares of this listed class outstanding on Jun 30, 2026. ≈ compares the latest reported holding with a share total from a different date; it is not a confirmed current stake.

Gray completes the 100% scale. Reported positions may overlap; holders have different reporting dates.

Source: SEC Form 13F ↗Updated Sep 29, 2026 · Quarterly data

Insider buys & sells

Jul 1, 2024–Jun 30, 2026

Buys16$314.0K disclosed value

Sells (SEC code S)1$108.6K disclosed value

Transaction	Insider	Type	Shares	Price	Value	Owned after
Jun 30, 2026Form 4	Rogers-Windsor Ramona LynnDirector	BuyCommon Stock	210.96	$23.70	$5.0K	23.1K
Jun 17, 2026Form 4	BATTIST CHRISTINEDirector	BuyCommon Stock	860	$23.23	$20.0K	14.1K
Jun 5, 2026Form 4	Thomas William R IIIDirector	BuyCommon Stock	5.0K	$23.40	$117.0K	18.7K
Jun 5, 2026Form 4	Thomas William R IIIDirector	SellCommon Stock	4.7K	$23.29	$108.6K	13.7K
Jun 1, 2026Form 4	Rogers-Windsor Ramona LynnDirector	BuyCommon Stock	213	$23.42	$5.0K	22.9K

Review ownership filings at SEC.gov ↗

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Capital Southwest Corp (CSWC)

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