Capital Southwest Corp. (DE:SFW)
FRANKFURT:SFW
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Earnings Data
Report Date
May 25, 2026After Close (Confirmed)
Period Ending
2026 (Q4)Consensus EPS Forecast
0.49Last Year’s EPS
0.46Same Quarter Last Year
Based on 0 Analysts Ratings
Earnings Call Summary
Earnings Call Sentiment|Positive
The call conveyed a clear message of operational strength and disciplined execution: solid recurring earnings ($0.60 pretax NII per share), robust UTI ($1.02 per share) and realized gains, healthy originations and 19% YoY credit portfolio growth, high-quality first-lien and sponsor-backed loan mix, strong liquidity, and successful capital markets activity (debt refinancing and accretive ATM issuance). Management also announced a strategic JV expected to enhance competitiveness and returns. Headwinds include persistent spread compression and competition in the lower middle market, a notable consumer sector exposure with somewhat higher leverage, reliance on ATM access, JV ramp/execution risk, and emerging AI-related underwriting considerations. On balance, highlights substantially outweigh the identified lowlights.Company Guidance
Strong recurring earnings and pretax NII
Pretax net investment income of $34.6 million, or $0.60 per share for the quarter, supported by strong recurring earnings across the portfolio.
Robust UTI and realized gains
Undistributed taxable income (UTI) was $1.02 per share, up from $0.68 per share in December 2024 (≈+50%), with $44.5 million in realized gains over the last 12 months and an additional $6.8 million realized post-quarter.
Consistent and accretive shareholder distributions
Board declared regular dividends of $0.58 for Jan–Mar 2026 and a supplemental quarterly dividend of $0.06 for March, bringing total declared dividends for March to $0.64 per share; cumulative dividend coverage since strategy launch is 110%.
Strong originations and deployment activity
Closed $244 million in total new commitments during the quarter (8 new portfolio companies + 16 add-on financings). Over the past 12 months, add-ons represented 29% of total new commitments.
Meaningful portfolio growth
On-balance sheet credit portfolio reached $1.8 billion, up 19% year-over-year from $1.5 billion as of December 2024.
High-quality credit mix and underwriting discipline
99% of the credit portfolio is first-lien senior secured; ~93% is sponsor-backed. Weighted average exposure per company ≈0.9%. At origination loans are typically rated 2 on a 1–5 scale; 90% of portfolio (by fair value) sits in top two rating categories.
Attractive portfolio yields and leverage metrics
Credit portfolio generated a weighted average yield of 11.3%, with weighted average leverage through security of 3.6x EBITDA and cash flow coverage of 3.4x (improved from 2.9x). New platform deals averaged ~3.0x senior leverage and ~36% loan-to-value.
Successful capital markets execution
Issued $350 million of 5.95% notes (due 2030) and used proceeds to redeem $150 million (2026) and $71.9 million (2028) notes without make-whole; raised ≈$53 million gross via equity ATM at a weighted average price of $21.11 (≈127% of prevailing NAV).
New JV to extend capabilities and enhance returns
Announced a first-out senior loan joint venture with a private credit asset manager to participate in larger/higher-quality deals; expected asset-level conservative leverage (~1.0–1.5x) and an eventual low- to mid-teens equity return for Capital Southwest once ramped.
Improving NAV, leverage and liquidity profile
NAV per share increased to $16.75 from $16.62 QoQ (+$0.13, ≈+0.8%). Regulatory leverage declined to 0.89x from 0.91x. Liquidity of approximately $438 million cash and undrawn credit plus $20 million SBA availability — >1.5x coverage of $285 million unfunded commitments.
Equity co-investment upside
Equity co-invest portfolio: 86 investments with total fair value reported as $183 million (~9% of portfolio fair value), marked at 133% of cost (≈+33% vs cost), producing $45.2 million of embedded unrealized appreciation (~$0.76 per share).
Low credit stress metrics
Nonaccruals represented just 1.5% of the investment portfolio at fair value, indicating limited distressed exposure.
Operational efficiency vs. peers
LTM operating leverage of 1.7%, significantly better than the BDC industry average of ~2.6%, and continued focus on internal management to capture fixed cost leverage as assets scale.
Milestone scale and market recognition
Total company assets passed $2 billion and the shares trade at >40% premium to book, reflecting market recognition of performance and capital-raising execution.
DE:SFW Earnings History
The table shows recent earnings report dates and whether the forecast was beat or missed. See the change in forecast and EPS from the previous year.
Beat
Missed
DE:SFW Earnings-Related Price Changes
Report Date | Price 1 Day Before | Price 1 Day After | Percentage Change |
|---|---|---|---|
Feb 02, 2026 | €19.34 | €19.22 | -0.61% |
Nov 03, 2025 | €17.04 | €16.55 | -2.88% |
Aug 06, 2025 | €18.05 | €17.70 | -1.93% |
May 14, 2025 | €16.64 | €16.37 | -1.59% |
Earnings announcements can affect a stock’s price. This table shows the stock's price the day before and the day after recent earnings reports, including the percentage change.
FAQ
When does Capital Southwest Corp. (DE:SFW) report earnings?
Capital Southwest Corp. (DE:SFW) is schdueled to report earning on May 25, 2026, After Close (Confirmed).
What is Capital Southwest Corp. (DE:SFW) earnings time?
Capital Southwest Corp. (DE:SFW) earnings time is at May 25, 2026, After Close (Confirmed).
Where can I see when companies are reporting earnings?
You can see which companies are reporting today on our designated earnings calendar.
What companies are reporting earnings today?
You can see a list of the companies which are reporting today on TipRanks earnings calendar.
What is the P/E ratio of Capital Southwest Corp. stock?
The P/E ratio of Capital Southwest is N/A.
What is DE:SFW EPS forecast?
DE:SFW EPS forecast for the fiscal quarter 2026 (Q4) is 0.49.