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Capital Southwest Corporation (CSWC): Examining the Performance of This Rising BDC Dividend Stock

Capital Southwest Corporation (NASDAQ:CSWC) is included among the 11 Best BDC Stocks to Buy Now.

Photo by Jp Valery on Unsplash

Capital Southwest Corporation (NASDAQ:CSWC) is based in Texas and focuses on lending to smaller, growing businesses that sit in the lower middle market. It’s not a widely talked-about stock, but over the years, the company has quietly built a record of steady financial growth and solid management discipline.

In the first quarter of its 2026 fiscal year, Capital Southwest Corporation (NASDAQ:CSWC) highlighted that its balance sheet kept getting stronger, while its overall risk levels continued to drop. The company also mentioned that deal activity had been picking up noticeably, and management expects to stay active on the lending front through the September quarter.

In a move meant to make its payout policy more appealing to investors, Capital Southwest Corporation (NASDAQ:CSWC) switched its dividend from quarterly to monthly payments starting in July. By late August, it had declared a monthly dividend of $0.1934 per share, along with a quarterly supplemental payout of $0.06. As of October 5, the stock’s dividend yield stood at around 10.3%.

During the same period, Capital Southwest Corporation (NASDAQ:CSWC) brought in roughly $42 million through its Equity ATM Program. Earlier in the year, in April 2025, it expanded its Corporate Credit Facility by another $25 million, bringing the total to $510 million. It also secured a second SBIC license from the US Small Business Administration— steps that give it more flexibility and room to grow its lending business.

While we acknowledge the potential of CSWC as an investment, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns and have limited downside risk. If you are looking for an AI stock that is more promising than CSWC and that has a 100x upside potential, check out our report about the cheapest AI stock.

READ NEXT: Dividend Champions List: Top 15 Stocks to Buy and 11 Best Affordable Dividend Stocks to Buy Now.

Disclosure: None.

The $250 Trillion AI Hype is Real. A few years from now, you’ll probably wish you’d bought this stock.

When Jeff Bezos said that one breakthrough technology would shape Amazon’s destiny, even Wall Street’s biggest analysts were caught off guard.

Fast forward a year and Amazon’s new CEO Andy Jassy described generative AI as a “once-in-a-lifetime” technology that is already being used across Amazon to reinvent customer experiences.

At the 8th Future Investment Initiative conference, Elon Musk predicted that by 2040 there would be at least 10 billion humanoid robots, with each priced between $20,000 and $25,000.

Do the math. According to Musk, this technology could be worth $250 trillion by 2040.

Put another way, that’s roughly equal to:

  • 175 Teslas
  • 107 Amazons
  • 140 Metas
  • 84 Googles
  • 65 Microsofts
  • And 55 Nvidias

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It’s a leap so massive, it could reshape how businesses, governments, and consumers operate worldwide.

Even if that $250 trillion figure sounds ambitious, major firms like PwC and McKinsey still see AI unlocking multi-trillion-dollar potential.

How could anything be worth that much?

The answer lies in a breakthrough so powerful it’s redefining how humanity works, learns, and creates.

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Before I reveal the details, let’s talk about how some of the richest people on the planet are positioning themselves.

  • Bill Gates sees artificial intelligence as the “biggest technological advance in my lifetime,” more transformative than the internet or personal computer, capable of improving healthcare, education, and addressing climate change.
  • Larry Ellison — through Oracle, is spending billions on Nvidia chips and partnering with Cohere to embed generative AI across Oracle’s cloud and apps.
  • Warren Buffett — not known for tech hype — says this breakthrough could have a ‘hugely beneficial social impact.

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