Capital Southwest (NASDAQ:CSWC) vs. Guggenheim Strategic Opportunities Fund (NYSE:GOF) Financial Contrast

Guggenheim Strategic Opportunities Fund (NYSE:GOF) and Capital Southwest (NASDAQ:CSWC) are both finance companies, but which is the superior investment? We will contrast the two businesses based on the strength of their institutional ownership, analyst recommendations, earnings, valuation, risk, profitability and dividends.

Profitability

This table compares Guggenheim Strategic Opportunities Fund and Capital Southwest’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Guggenheim Strategic Opportunities Fund	N/A	N/A	N/A
Capital Southwest	46.68%	13.88%	6.45%

Earnings and Valuation

This table compares Guggenheim Strategic Opportunities Fund and Capital Southwest”s revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Guggenheim Strategic Opportunities Fund	$221.40 million	N/A	N/A	N/A	N/A
Capital Southwest	$232.10 million	6.85	$113.00 million	$1.81	13.79

Capital Southwest has higher revenue and earnings than Guggenheim Strategic Opportunities Fund.

Insider and Institutional Ownership

23.4% of Capital Southwest shares are held by institutional investors. 2.7% of Capital Southwest shares are held by company insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a company is poised for long-term growth.

Analyst Ratings

This is a breakdown of recent ratings and target prices for Guggenheim Strategic Opportunities Fund and Capital Southwest, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Guggenheim Strategic Opportunities Fund	0	0	0	0	0.00
Capital Southwest	0	3	6	0	2.67

Capital Southwest has a consensus price target of $23.60, indicating a potential downside of 5.45%. Given Capital Southwest’s stronger consensus rating and higher probable upside, analysts plainly believe Capital Southwest is more favorable than Guggenheim Strategic Opportunities Fund.

Dividends

Guggenheim Strategic Opportunities Fund pays an annual dividend of $2.18 per share and has a dividend yield of 23.2%. Capital Southwest pays an annual dividend of $2.32 per share and has a dividend yield of 9.3%. Capital Southwest pays out 128.2% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Capital Southwest has raised its dividend for 2 consecutive years.

Summary

Capital Southwest beats Guggenheim Strategic Opportunities Fund on 10 of the 12 factors compared between the two stocks.

About Guggenheim Strategic Opportunities Fund

Guggenheim Strategic Opportunities Fund is a closed-ended balanced mutual fund launched and managed by Guggenheim Funds Investment Advisors, LLC. The fund is co-managed by Guggenheim Partners Investment Management LLC. It invests in public equity and fixed income markets across the globe. For its equity portion, the fund invests directly and through derivatives such as writing covered call and put options to invest in the stocks of companies operating across diversified sectors. It invests in the value stocks of companies of all capitalizations. The fund employs a combination of quantitative and qualitative analysis to create its portfolio. For the fixed income component of its portfolio, it seeks to invest in securities such as corporate bonds, loans, loan participations, structured finance investments, U.S. government and agency securities that are not rated below below CCC by S&P or Caa2 by Moody's. For the equity part of the portfolio the fund benchmarks S&P 500 Index and for the fixed income part it benchmarks Barclays Aggregate Bond Index. It was formerly known as Claymore/Guggenheim Strategic Opportunities Fund. Guggenheim Strategic Opportunities Fund was formed on November 13, 2006 and is domiciled in the United States.

About Capital Southwest

Capital Southwest Corporation is a business development company specializing in credit and private equity and venture capital investments in middle market companies, mezzanine, later stage, mature, late venture, emerging growth, buyouts, industry consolidation, recapitalizations and growth capital investments. It does not invest in startups, publicly traded companies, real estate developments, project finance opportunities, oil and gas exploration businesses, troubled companies, turnarounds, and companies in which significant senior management is departing. In lower middle market, the firm typically invests in growth financing, bolt-on acquisitions, new platform acquisitions, refinancing, dividend recapitalizations, sponsor-led buyouts, and management buyouts situations. The investment structures are Unitranche debt, subordinated debt, senior debt, first and second lien debt, and preferred and common equity. The firm makes equity co-investments alongside debt investments, up to 20% of total check and only makes non-control investments. The firm is Industry agnostic, but it prefers to invest in Industrial manufacturing and services, value-added distribution, healthcare products and services, business services, specialty chemicals, food and beverage, tech-enabled services and SaaS models. The firm seeks to invest in energy services and products, industrial technologies, and specialty chemicals and products. Within energy services and products, the firm seeks to invest in each segment of the industry, including upstream, midstream and downstream, excluding exploration and production with a focus on differentiated products and services, equipment and tool rental, consumable products, and drilling and completion chemicals. Within industrial technologies, it seeks to invest in automation and process controls, handling and packaging equipment, industrial filtration and fluid handling, measurement, monitoring and testing, professional tools, and sensors and instrumentation. Within and specialty chemicals and products, the firm seeks to invest in businesses that develop and manufacture highly differentiated chemicals and products including adhesives, coatings and sealants, catalysts and absorbents, cosmeceuticals, fine chemicals, flavors and fragrances, performance lubricants, polymers, plastics and composites, chemical dispensing and filtration equipment, professional and industrial trade consumables and tools, engineered solutions for HVAC, plumbing, and electrical installations, specified high performance materials for fire protection and oilfield applications. It may also invest in exceptional opportunities in building products. The firm seeks to invest in the United States and North America. The firm seeks to make investments ranging from $5 million and $25 million in securities. It leads $5 to $70 million financings, Its Target holds of $5 million and $45 million, and the firm is willing to backstop up to $55mm with an active network of co-investors. It seeks to invest in the firm with minimum EBITDA is $3 million and $25 million. In addition to making direct investments, the firm allocates capital to syndicated first and second lien term loans in the upper middle market. Criteria for Upper Middle Market Syndicated 1st Lien is EBITDA Size more than $30 million, Closing Leverage greater than 4 times, investment hold size between $5 million and $7 million up to $15mm with senior loan fund, investment yield greater than 6.5%. Criteria for Upper Middle Market Syndicated 2nd Lien is EBITDA Size more than $50 million, Closing Leverage greater than 6 times, investment hold size between $5 million and $7 million, investment yield greater than 9%. It prefers to take a majority and minority stake. The firm has the flexibility to hold investments for very long period in its portfolio companies. It may also invest through warrants. The firm prefers to take Board participation in its portfolio companies. Capital Southwest Corporation was founded on April 19, 1961 and is based in Dallas, Texas.