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4 Reasons to Add Capital Southwest (CSWC) to Your Portfolio Now
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Capital Southwest Corporation (CSWC - Free Report) stock looks like an attractive investment option now. CSWC’s top line is expected to improve in the near term. The company’s earnings are expected to rise in the upcoming years. Thus, driven by strong fundamentals and solid growth prospects, Capital Southwest appears to be a promising investment option right now.
Analysts are optimistic regarding the company’s earnings growth potential. The Zacks Consensus Estimate for CSWC’s fiscal 2024 earnings has been revised 1.6% upward over the past 30 days. It currently carries a Zacks Rank #2 (Buy).
Looking at its price performance, shares of CSWC have gained 10.9% over the past six months compared with the industry’s 1.8% growth.
Image Source: Zacks Investment Research
Mentioned below are some other factors that make the Capital Southwest stock a solid pick right now.
Earnings Per Share (EPS) Growth: In the last three to five years, the company witnessed EPS growth of 12.44%, higher than the industry’s average of 7.8%. Earnings are projected to rise 12.66% in fiscal 2024 and 1.32% in fiscal 2025.
CSWS has an impressive earnings surprise history. Its earnings met the Zacks Consensus Estimate in three of the trailing four quarters and missed once, the average surprise being 3.88%.
Revenue Strength: Capital Southwest’s total investment income witnessed a CAGR of 24.4% over the last three fiscal years (2020-2023). The company’s top line is expected to keep improving in the near term. In 2024 and 2025, the company’s top line is expected to witness growth of 39.2% and 11.7%, respectively.
Steady Capital Deployments: CSWC’s capital deployments are sustainable on a decent liquidity position. The company pays quarterly dividends on a regular basis. On Apr 26, Capital Southwest announced a quarterly dividend of 59 cents per share, consisting of a regular dividend of 54 cents and a supplemental dividend of 5 cents.
In July 2021, CSWC’s board of directors approved a share repurchase program, authorizing the company to repurchase up to $20 million of its outstanding shares of common stock. As of Mar 31, 2023, it had $20 million available under the share repurchase program. Such strategic moves enhance shareholders’ value and boost investors’ confidence in the stock.
Superior Return on Equity (ROE): The company’s ROE of 13.21% is higher than the industry average of 12.69%. This shows that it reinvests its cash more efficiently than its peers.
Other Stocks Worth a Look
A couple of other top-ranked stocks from the investment management sector are Janus Henderson Group (JHG - Free Report) and Monroe Capital (MRCC - Free Report) .
The Zacks Consensus Estimate for JHG’s 2023 earnings has been revised 1.8% upward over the past 60 days. It carries a Zacks Rank #2 at present. The stock has gained 10.1% over the past six months.
The consensus estimate for MRCC’s 2023 earnings has been revised 9.5% upward over the past 60 days. It sports a Zacks Rank #1 at present. The company’s share price has decreased 6.3% over the past six months.
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4 Reasons to Add Capital Southwest (CSWC) to Your Portfolio Now
Capital Southwest Corporation (CSWC - Free Report) stock looks like an attractive investment option now. CSWC’s top line is expected to improve in the near term. The company’s earnings are expected to rise in the upcoming years. Thus, driven by strong fundamentals and solid growth prospects, Capital Southwest appears to be a promising investment option right now.
Analysts are optimistic regarding the company’s earnings growth potential. The Zacks Consensus Estimate for CSWC’s fiscal 2024 earnings has been revised 1.6% upward over the past 30 days. It currently carries a Zacks Rank #2 (Buy).
Looking at its price performance, shares of CSWC have gained 10.9% over the past six months compared with the industry’s 1.8% growth.
Image Source: Zacks Investment Research
Mentioned below are some other factors that make the Capital Southwest stock a solid pick right now.
Earnings Per Share (EPS) Growth: In the last three to five years, the company witnessed EPS growth of 12.44%, higher than the industry’s average of 7.8%. Earnings are projected to rise 12.66% in fiscal 2024 and 1.32% in fiscal 2025.
CSWS has an impressive earnings surprise history. Its earnings met the Zacks Consensus Estimate in three of the trailing four quarters and missed once, the average surprise being 3.88%.
Revenue Strength: Capital Southwest’s total investment income witnessed a CAGR of 24.4% over the last three fiscal years (2020-2023). The company’s top line is expected to keep improving in the near term. In 2024 and 2025, the company’s top line is expected to witness growth of 39.2% and 11.7%, respectively.
Steady Capital Deployments: CSWC’s capital deployments are sustainable on a decent liquidity position. The company pays quarterly dividends on a regular basis. On Apr 26, Capital Southwest announced a quarterly dividend of 59 cents per share, consisting of a regular dividend of 54 cents and a supplemental dividend of 5 cents.
In July 2021, CSWC’s board of directors approved a share repurchase program, authorizing the company to repurchase up to $20 million of its outstanding shares of common stock. As of Mar 31, 2023, it had $20 million available under the share repurchase program. Such strategic moves enhance shareholders’ value and boost investors’ confidence in the stock.
Superior Return on Equity (ROE): The company’s ROE of 13.21% is higher than the industry average of 12.69%. This shows that it reinvests its cash more efficiently than its peers.
Other Stocks Worth a Look
A couple of other top-ranked stocks from the investment management sector are Janus Henderson Group (JHG - Free Report) and Monroe Capital (MRCC - Free Report) .
The Zacks Consensus Estimate for JHG’s 2023 earnings has been revised 1.8% upward over the past 60 days. It carries a Zacks Rank #2 at present. The stock has gained 10.1% over the past six months.
You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
The consensus estimate for MRCC’s 2023 earnings has been revised 9.5% upward over the past 60 days. It sports a Zacks Rank #1 at present. The company’s share price has decreased 6.3% over the past six months.