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Investing.com - Capital Southwest Corp (NASDAQ:CSWC) received a Hold rating as Clear Street initiated coverage on the business development company with a $22.00 price target. The company, which boasts an impressive 17.98% dividend yield and a P/E ratio of 13.75, has demonstrated strong financial health according to InvestingPro metrics.
Clear Street cited Capital Southwest’s consistent performance as an internally managed business development company (BDC) with strong shareholder alignment and disciplined underwriting practices. InvestingPro data reveals the company has maintained dividend payments for 43 consecutive years, showcasing its commitment to shareholder returns.
The firm highlighted the company’s conservative lower middle market strategy that focuses on sponsor-backed companies, with a $1.8 billion portfolio consisting primarily of first lien senior secured loans and complementary equity investments.
According to Clear Street, Capital Southwest offers investors consistent income and downside protection through its historically stable net asset value per share, growing dividends, robust liquidity, and access to low-cost Small Business Investment Company (SBIC) financing.
Despite these positive attributes, Clear Street believes the current valuation already reflects much of Capital Southwest’s fundamental strength, leading to the Hold rating.
In other recent news, Capital Southwest Corporation announced its Q1 2025 earnings, showing a mixed performance. The company reported earnings per share (EPS) of $0.59, which was slightly below the forecast of $0.5964. However, the revenue exceeded expectations, coming in at $55.95 million compared to the anticipated $54.34 million. Following these results, Raymond James raised its price target for Capital Southwest to $25.00 from $23.00, maintaining an Outperform rating. This adjustment reflects the company’s financial performance for the June quarter, which was in line with expectations. Additionally, JMP Securities reiterated its Market Outperform rating for Capital Southwest, setting a price target of $25.00. The firm expressed confidence in the company’s strong underlying fundamentals. These developments highlight the attention Capital Southwest is receiving from analysts and investors.
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