Analyzing SPDR S&P Retail (ETF) (XRT) and Capital Southwest Corporation (CSWC)
Capital Southwest Corporation (NASDAQ: CSWC) and SPDR S&P Retail (ETF) (NYSE:XRT) are both small-cap finance companies, but which is the better business? We will contrast the two businesses based on the strength of their earnings, profitability, risk, valuation, analyst recommendations, institutional ownership and dividends.
Institutional and Insider Ownership
61.8% of Capital Southwest Corporation shares are owned by institutional investors. 5.9% of Capital Southwest Corporation shares are owned by insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a company will outperform the market over the long term.
This is a summary of current recommendations for Capital Southwest Corporation and SPDR S&P Retail (ETF), as provided 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 presently has a consensus price target of $20.25, suggesting a potential upside of 16.92%. Given Capital Southwest Corporation’s higher possible upside, analysts clearly believe Capital Southwest Corporation is more favorable than SPDR S&P Retail (ETF).
Capital Southwest Corporation pays an annual dividend of $0.96 per share and has a dividend yield of 5.5%. SPDR S&P Retail (ETF) does not pay a dividend. Capital Southwest Corporation pays out 55.5% of its earnings in the form of a dividend.
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%|
Earnings & Valuation
This table compares Capital Southwest Corporation and SPDR S&P Retail (ETF)’s revenue, earnings per share and valuation.
|Gross Revenue||Price/Sales Ratio||NetIncome||Earnings Per Share||Price/Earnings Ratio|
|Capital Southwest Corporation||$23.50 million||11.81||$23.47 million||$1.73||10.01|
|SPDR S&P Retail (ETF)||N/A||N/A||N/A||($4.15)||-9.68|
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.
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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