Capital Southwest Corporation

AI-generated fair value estimate for this company.

Method: Justified NAV model: net asset value per share of $16.61; implied return on NAV of 10.9% (derived from a $2.56 annual dividend divided by a 141% payout ratio to back into an estimated $1.82 EPS); 11% cost of equity; 2% long-run growth; implied NAV multiple of 0.99x.

Reasoning: Capital Southwest is a business development company best valued against its published net asset value rather than an unlevered FCF DCF; its payout ratio above 100% of earnings and a weak Altman Z-Score both signal earnings coverage pressure, so the model conservatively implies fair value at roughly net asset value rather than the premium at which the stock currently trades.