Capital Southwest Corporation (NASDAQ: CSWC) and SPDR S&P Retail ETF (NYSE:XRT) are both small-cap investment trusts companies, but which is the better stock? We will compare the two companies based on the strength of their profitability, analyst recommendations, valuation, institutional ownership, dividends, earnings and risk.
Capital Southwest Corporation pays an annual dividend of $0.96 per share and has a dividend yield of 5.7%. SPDR S&P Retail ETF does not pay a dividend. Capital Southwest Corporation pays out 55.2% of its earnings in the form of a dividend.
Earnings & Valuation
This table compares Capital Southwest Corporation and SPDR S&P Retail ETF’s gross revenue, earnings per share and valuation.
|Gross Revenue||Price/Sales Ratio||NetIncome||Earnings Per Share||Price/Earnings Ratio|
|Capital Southwest Corporation||$23.50 million||11.50||$23.47 million||$1.74||9.70|
|SPDR S&P Retail ETF||N/A||N/A||N/A||($4.15)||-9.59|
Capital Southwest Corporation has higher revenue and earnings than SPDR S&P Retail ETF. SPDR S&P Retail ETF is trading at a lower price-to-earnings ratio than Capital Southwest Corporation, indicating that it is currently the more affordable of the two stocks.
This table compares Capital Southwest Corporation and SPDR S&P Retail ETF’s net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
|Capital Southwest Corporation||90.67%||5.09%||4.37%|
|SPDR S&P Retail ETF||2,863.69%||23.50%||22.12%|
Institutional & Insider Ownership
61.7% of Capital Southwest Corporation shares are held by institutional investors. 5.9% of Capital Southwest Corporation shares are held by company insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a company is poised for long-term growth.
This is a breakdown of current ratings and target prices for Capital Southwest Corporation and SPDR S&P Retail ETF, as reported by MarketBeat.com.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
|Capital Southwest Corporation||0||1||3||0||2.75|
|SPDR S&P Retail ETF||0||0||0||0||N/A|
Capital Southwest Corporation currently has a consensus price target of $20.25, indicating a potential upside of 20.04%. Given Capital Southwest Corporation’s higher possible upside, research analysts clearly believe Capital Southwest Corporation is more favorable than SPDR S&P Retail ETF.
Capital Southwest Corporation beats SPDR S&P Retail ETF on 7 of the 11 factors compared between the two stocks.
About Capital Southwest Corporation
Capital Southwest Corporation is an investment company that specializes in providing customized financing to middle market companies in a range of industry segments located primarily in the United States. The Company is a specialty lending company. Its principal investment objective is to produce risk-adjusted returns by generating current income from debt investments and capital appreciation from its equity and equity related investments. It focuses on partnering with business owners, management teams and financial sponsors to provide financing solutions to fund growth, changes of control, or other corporate events. In allocating future investments, it focuses on investing in senior and subordinated debt securities secured by security interests in portfolio company assets, coupled with equity interests. It targets senior and subordinated investments in the lower middle market and private loan transactions, as well as first and second lien syndicated loans in middle market companies.
About SPDR S&P Retail ETF
SPDR S&P Retail ETF (the Fund) seeks to replicate as closely as possible the performance of the S&P Retail Select Industry Index (the Index). The Index is an equal weighted market cap index. The Index represents the retail sub-industry portion of the S&P Total Market Index. The Fund invests in industries, such as apparel retail, automotive retail, food retail, department stores, Internet retail, general merchandise stores, drug retail, and hypermarkets and super centers. The Fund’s investment advisor is SSgA Funds Management, Inc.
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