CSWC (Capital Southwest Corp) vs S&P 500 Comparison

CSWC

S&P 500

Compare the stock's returns with its benchmark index and competitors. Gain insights into its relative performance over time.

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CSWC

S&P 500

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CSWC

S&P 500

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Compare the stock's returns with its benchmark index and competitors. Gain insights into its relative performance over time.

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S&P 500

CSWC

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Compare the stock's returns with its benchmark index and competitors. Gain insights into its relative performance over time.

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Capital Southwest Corp
Glance View

Market Cap

1B USD

Industry

Financial Services

Founded in 1961, Capital Southwest Corporation has crafted an intriguing narrative in the world of business development companies. Situated in Dallas, Texas, its saga is rooted in middle-market lending, where it provides tailored financial solutions to a discerning clientele. The company has largely capitalized on its expertise in direct lending, focusing primarily on supporting companies in their growth stages. By offering a blend of equity and debt financing, Capital Southwest empowers businesses to scale operations, fund strategic acquisitions, and navigate complex financial transitions, effectively positioning itself as a catalyst for entrepreneurial success. At the heart of Capital Southwest’s revenue generation is its income-producing investment portfolio, which is diversified across both industry sectors and types of investments. By extending senior secured loans, second lien loans, and equity co-investments, the company collects interest and fees that supercharge its earnings. This robust portfolio management not only mitigates risk through diversification but also enhances returns that feed back to the shareholders in the form of dividends. With its strategic focus on credit quality and underwriting discipline, Capital Southwest ensures the sustainability of its revenue streams while maintaining a steady commitment to shareholder value.

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CSWC Intrinsic Value

What is Intrinsic Value?

Economic Moat is a concept popularized by Warren Buffett to describe a company's durable competitive advantage. It represents the 'moat' that protects a company from competitors and helps it sustain profitability over the long term. Our analysis of the past 10 years showed that companies with a wide economic moat significantly outperformed the market, delivering +645% returns compared to +189% for the S&P 500.

Our research into Economic Moat performance spans the past 10 years and focuses on companies with a wide economic moat. For this analysis, we calculated the average stock price returns of these companies, comparing them to the performance of the S&P 500 index over the same period.

The results were compelling: wide moat stocks achieved a remarkable +645% average return, compared to +188% for the broader market. This difference highlights the long-term benefits of investing in businesses that can maintain their market position and pricing power over time.

Note: This research does not account for survivorship bias. Past performance is not indicative of future results.

Determining whether a company has an economic moat requires both a deep dive into financial metrics and a qualitative assessment of its competitive position. Our analysts conduct a rigorous evaluation that focuses on identifying structural advantages that enable a company to sustain profitability and defend its market share over the long term.

The process begins with an analysis of a company’s historical financial performance. We assess how consistently the company has generated returns above its cost of capital and whether those returns have been stable or improving. However, financial performance alone doesn’t reveal the full picture. To understand the sources of these advantages, we evaluate five key drivers of economic moats:

Network Effect: We analyze whether the value of a company’s product or service grows as its user base expands. Platforms like payment systems or marketplaces benefit from this self-reinforcing.

Switching Costs: We assess whether customers face significant costs or disruptions when switching to a competitor’s product or service. High switching costs create customer stickiness and provide pricing power.

Intangible Assets: Strong brands, patents, and regulatory licenses can protect a company’s market position by creating barriers for competitors or enabling premium pricing. For example, a well-recognized consumer brand may command higher customer loyalty and margins.

Efficient scale: Occurs when a market is optimally served by one or a few players, making it unprofitable for new entrants to compete. This typically happens in industries with high fixed costs or geographic constraints, such as utilities or pipelines.

Cost Advantage: Companies with structural cost advantages can produce goods or services at a lower cost than their competitors, enabling them to offer competitive pricing or maintain higher margins. These advantages often arise from economies of scale, superior supply chain management, or proprietary technology. Firms like Walmart leverage their massive scale to negotiate better terms with suppliers, allowing them to undercut competitors on price.

By examining these factors in combination with a company’s financial performance and market positioning, we classify each company into one of three categories:

This rigorous evaluation ensures that our moat ratings are both comprehensive and reliable, giving investors the tools they need to make well-informed, long-term decisions.

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CSWC

vs

S&P 500

Stocks Performance
CSWC vs S&P 500

Performance Gap
CSWC vs S&P 500

Performance By Year
CSWC vs S&P 500

Competitors Performance
Capital Southwest Corp vs Peers

Capital Southwest Corp
Glance View

Company

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CSWC vs S&P 500

Stocks Performance CSWC vs S&P 500

Performance Gap CSWC vs S&P 500

Performance By Year CSWC vs S&P 500

Competitors Performance Capital Southwest Corp vs Peers

Capital Southwest Corp Glance View

Company

Help

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Stocks

CSWC

vs

S&P 500

Stocks Performance
CSWC vs S&P 500

Performance Gap
CSWC vs S&P 500

Performance By Year
CSWC vs S&P 500

Competitors Performance
Capital Southwest Corp vs Peers

Capital Southwest Corp
Glance View