Capital Southwest: An All-Weather BDC For Retirees, Yielding 10%
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Roberts Berzins, CFA12.84K FollowersFollow5ShareSavePlay(9min)Comments(2)SummaryCapital Southwest has the right tools to weather pressures from lower interest rates and create value in the long run, across different cycles.The secret sauce is really the embedded trifecta of internal management, high-quality equity bias, and conservative capital structure.The premium over NAV for CSWC might limit alpha-like performance in case of a sector-wide optimism, and the current supplemental distributions might be cut, leaving only the base dividend in place.Yet, for sustainable income and stable value creation investors, the P/NAV aspect comes in handy, and the base dividend is really what matters, which would still produce 10% income. Sean_Kuma/iStock via Getty Images In the past couple of days, the BDC land has been extremely volatile, registering significant ups and downs. But still, on a YTD basis, the sector has managed to advance, generally in line with the overall stock market. It seemsThis article was written byRoberts Berzins, CFA12.84K FollowersFollowRoberts Berzins has over a decade of experience in the financial management helping top-tier corporates shape their financial strategies and execute large-scale financings. He has also made significant efforts to institutionalize REIT framework in Latvia to boost the liquidity of pan-Baltic capital markets. Other policy-level work includes the development of national SOE financing guidelines and framework for channeling private capital into affordable housing stock. Roberts is a CFA Charterholder, ESG investing certificate holder, has had an internship in Chicago board of trade (albeit, being resident and living in Latvia), and is actively involved in "thought-leadership" activities to support the development of pan-Baltic capital markets.Analyst’s Disclosure:I/we have no stock, option or similar derivative position in any of the companies mentioned, and no plans to initiate any such positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article. Seeking Alpha's Disclosure: Past performance is no guarantee of future results. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. Any views or opinions expressed above may not reflect those of Seeking Alpha as a whole. Seeking Alpha is not a licensed securities dealer, broker or US investment adviser or investment bank. Our analysts are third party authors that include both professional investors and individual investors who may not be licensed or certified by any institute or regulatory body.