As you know by my name, I love dividends. And in addition to sharing on here, I write regularly on the investment platform- Seeking Alpha.
My goal there is to teach everyday investors about building wealth, so they won’t to need to work to traditional retirement age.
I want to help you take control of your life, have F.I.R.E.
Here at Dividend Collection Agency the goal is to give investors and/or readers a different perspective. We take a simple approach to building wealth. And although investing may seem easy, people often miss opportunities by over complicating it.
But we are here to help.
Current Price: $24.64
Dividend: $0.19
The BDC sector has long been one of my favorites for income investing. Although I turned more cautious in early 2025 due to macro uncertainty, Capital Southwest (CSWC) has continued to stand out.
Shares are up nearly 12% over the past year, outperforming many BDC peers. And after reviewing fiscal Q1 2027 earnings, I continue to view CSWC as one of the highest-quality BDCs available. The problem is valuation.
📊 Another Solid Quarter
CSWC reported net investment income (NII) of $0.58 per share, beating expectations by $0.03, although this declined slightly sequentially and year-over-year.
On a total basis, however, NII increased to $35.7 million, up from $34.6 million last quarter and $31.9 million a year ago.
The portfolio also expanded to $2.2 billion, compared with $2.1 billion last quarter and roughly $1.8 billion a year earlier. First-lien exposure remained high at 89.6%, supporting the portfolio’s overall quality.
Investment activity was another positive. CSWC originated $222.3 million in new commitments to 11 companies, along with $173 million in add-on investments.
🤯 Some Credit Pressure Emerging
The quarter wasn’t perfect.
Net realized and unrealized losses increased to $10.9 million, contributing to NAV declining to $16.61 per share. Non-accruals also increased to 2.9% at cost and 1.1% at fair value.
While these numbers deserve monitoring, they aren’t alarming yet. Credit pressure has been increasing across the BDC sector as higher-for-longer rates continue putting pressure on borrowers.
💵 The Dividend Still Looks Safe
Dividend safety remains one of CSWC’s biggest strengths.
