Capital Southwest (CSWC) Competitors

Ares Capital (NASDAQ:ARCC) and Capital Southwest (NASDAQ:CSWC) are both finance companies, but which is the superior business? We will contrast the two companies based on the strength of their risk, valuation, institutional ownership, earnings, media sentiment, dividends, profitability and analyst recommendations.

Is ARCC or CSWC a better dividend stock?

Ares Capital pays an annual dividend of $1.92 per share and has a dividend yield of 9.8%. Capital Southwest pays an annual dividend of $2.32 per share and has a dividend yield of 11.4%. Ares Capital pays out 93.7% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Capital Southwest pays out 140.6% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Capital Southwest has raised its dividend for 2 consecutive years. Capital Southwest is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Do analysts prefer ARCC or CSWC?

Ares Capital presently has a consensus price target of $22.63, indicating a potential upside of 15.97%. Capital Southwest has a consensus price target of $24.10, indicating a potential upside of 18.14%. Given Capital Southwest's higher probable upside, analysts clearly believe Capital Southwest is more favorable than Ares Capital.

Company	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Ares Capital	0 Sell rating(s)	2 Hold rating(s)	8 Buy rating(s)	0 Strong Buy rating(s)	2.80
Capital Southwest	1 Sell rating(s)	2 Hold rating(s)	5 Buy rating(s)	0 Strong Buy rating(s)	2.50

Which has more risk and volatility, ARCC or CSWC?

Ares Capital has a beta of 0.68, meaning that its stock price is 32% less volatile than the S&P 500. Comparatively, Capital Southwest has a beta of 0.95, meaning that its stock price is 5% less volatile than the S&P 500.

Does the media refer more to ARCC or CSWC?

In the previous week, Capital Southwest had 1 more articles in the media than Ares Capital. MarketBeat recorded 16 mentions for Capital Southwest and 15 mentions for Ares Capital. Ares Capital's average media sentiment score of 1.25 beat Capital Southwest's score of 0.36 indicating that Ares Capital is being referred to more favorably in the media.

Company	Very Positive	Positive	Neutral	Negative	Very Negative	Overall Sentiment
Ares Capital	11 Very Positive mention(s)	2 Positive mention(s)	2 Neutral mention(s)	0 Negative mention(s)	0 Very Negative mention(s)	Positive
Capital Southwest	5 Very Positive mention(s)	1 Positive mention(s)	6 Neutral mention(s)	2 Negative mention(s)	0 Very Negative mention(s)	Neutral

Is ARCC or CSWC more profitable?

Ares Capital has a net margin of 44.94% compared to Capital Southwest's net margin of 39.95%. Capital Southwest's return on equity of 14.17% beat Ares Capital's return on equity.

Company	Net Margins	Return on Equity	Return on Assets
Ares Capital	44.94%	10.48%	5.00%
Capital Southwest	39.95%	14.17%	6.77%

Do insiders and institutionals have more ownership in ARCC or CSWC?

27.4% of Ares Capital shares are owned by institutional investors. Comparatively, 23.4% of Capital Southwest shares are owned by institutional investors. 0.5% of Ares Capital shares are owned by company insiders. Comparatively, 2.8% of Capital Southwest shares are owned by company insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a stock will outperform the market over the long term.

Which has better earnings and valuation, ARCC or CSWC?

Ares Capital has higher revenue and earnings than Capital Southwest. Ares Capital is trading at a lower price-to-earnings ratio than Capital Southwest, indicating that it is currently the more affordable of the two stocks.

Company	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Ares Capital	$2.99B	4.60	$1.52B	$2.05	9.52
Capital Southwest	$204.44M	5.55	$70.55M	$1.65	12.36

Summary

Capital Southwest beats Ares Capital on 10 of the 19 factors compared between the two stocks.