Capital Southwest (NASDAQ:CSWC) Shares Pass Above 200-Day Moving Average - Should You Sell?

Key Points

• Capital Southwest stock recently crossed above its 200-day moving average (200-day = $22.12), trading as high as $23.69 and last at $23.52 on volume of 526,191 shares, a short-term bullish technical signal.
• The company announced a monthly dividend of $0.1934 (payable June 30, record June 15), which annualizes to a 9.9% yield but comes with a high payout ratio of 128.18%, indicating potential sustainability risk.
• Analysts hold a consensus Moderate Buy rating with an average target of $23.42; recent results showed EPS of $0.64 (in line) and revenue of $61.45M (above estimates), with a P/E of 12.99 and ROE of 13.76%.

Capital Southwest Corporation (NASDAQ:CSWC - Get Free Report) crossed above its 200-day moving average during trading on Wednesday . The stock has a 200-day moving average of $22.12 and traded as high as $23.69. Capital Southwest shares last traded at $23.52, with a volume of 526,191 shares traded.

Analyst Ratings Changes

Several research firms have issued reports on CSWC. Zacks Research upgraded Capital Southwest from a "strong sell" rating to a "hold" rating in a research note on Monday, January 5th. Weiss Ratings upgraded shares of Capital Southwest from a "hold (c+)" rating to a "buy (b-)" rating in a report on Wednesday, January 28th. Six investment analysts have rated the stock with a Buy rating and three have issued a Hold rating to the company's stock. Based on data from MarketBeat.com, the stock presently has a consensus rating of "Moderate Buy" and an average target price of $23.42.

Capital Southwest Stock Performance

The company has a current ratio of 0.15, a quick ratio of 0.15 and a debt-to-equity ratio of 0.51. The stock has a market capitalization of $1.41 billion, a price-to-earnings ratio of 12.99 and a beta of 0.72. The firm's fifty day moving average price is $22.59 and its 200 day moving average price is $22.12.

Capital Southwest (NASDAQ:CSWC - Get Free Report) last announced its earnings results on Monday, February 2nd. The asset manager reported $0.64 earnings per share (EPS) for the quarter, meeting analysts' consensus estimates of $0.64. Capital Southwest had a return on equity of 13.76% and a net margin of 45.46%.The company had revenue of $61.45 million for the quarter, compared to analyst estimates of $57.37 million. During the same quarter in the previous year, the company earned $0.63 earnings per share. Analysts forecast that Capital Southwest Corporation will post 2.37 EPS for the current fiscal year.

Capital Southwest Announces Dividend

The company also recently announced a monthly dividend, which will be paid on Tuesday, June 30th. Investors of record on Monday, June 15th will be issued a dividend of $0.1934 per share. This represents a c) dividend on an annualized basis and a yield of 9.9%. The ex-dividend date is Monday, June 15th. Capital Southwest's dividend payout ratio (DPR) is 128.18%.

Institutional Trading of Capital Southwest

A number of institutional investors and hedge funds have recently bought and sold shares of CSWC. Royal Bank of Canada increased its stake in Capital Southwest by 13.4% during the 1st quarter. Royal Bank of Canada now owns 69,139 shares of the asset manager's stock worth $1,544,000 after buying an additional 8,188 shares during the period. Goldman Sachs Group Inc. grew its stake in shares of Capital Southwest by 246.5% in the first quarter. Goldman Sachs Group Inc. now owns 257,672 shares of the asset manager's stock worth $5,751,000 after acquiring an additional 183,313 shares in the last quarter. Caxton Associates LLP acquired a new position in shares of Capital Southwest in the first quarter worth $318,000. Creative Planning purchased a new stake in shares of Capital Southwest during the second quarter worth $201,000. Finally, Invesco Ltd. raised its stake in shares of Capital Southwest by 21.8% in the second quarter. Invesco Ltd. now owns 34,003 shares of the asset manager's stock valued at $749,000 after acquiring an additional 6,094 shares in the last quarter. 23.42% of the stock is currently owned by hedge funds and other institutional investors.

About Capital Southwest

Capital Southwest NASDAQ: CSWC is a publicly traded investment firm structured as a business development company (BDC) that provides customized financing solutions to middle-market companies across the United States. The firm offers a spectrum of debt and equity capital, including senior secured loans, mezzanine debt, and both preferred and common equity investments. By partnering with corporate management teams, Capital Southwest seeks to support growth initiatives, recapitalizations, acquisitions, and ownership transitions.

Founded in 1961 and headquartered in Dallas, Texas, Capital Southwest has cultivated a track record of long-term partnerships with privately held businesses and select public companies.

This instant news alert was generated by narrative science technology and financial data from MarketBeat in order to provide readers with the fastest reporting and unbiased coverage. Please send any questions or comments about this story to contact@marketbeat.com.