Core Insights - The article emphasizes the importance of a hybrid investment strategy that combines classic dividend growth stocks with Business Development Companies, REITs, and Closed End Funds to enhance investment income while achieving total returns comparable to traditional index funds [1]. Investment Strategy - The investment approach focuses on high-quality dividend stocks and assets that provide long-term growth potential, which can significantly contribute to income generation [1]. - The strategy aims to create a balanced portfolio that captures total returns on par with the S&P 500, indicating a blend of growth and income [1].

Group 1 - The focus of iREIT+HOYA Capital is on income-producing asset classes that provide sustainable portfolio income, diversification, and inflation hedging [1] - The recent market rally has led to total returns, but there is a concern about unrealized capital gains potentially disappearing as the market approaches bubble territory [2] - Dividends are emphasized as a reliable source of income that cannot be taken back, contrasting with the volatility of capital gains [2] Group 2 - The article highlights the importance of defensive stocks for medium- to long-term investment strategies [2]

Group 1 - iREIT+HOYA Capital focuses on income-producing asset classes that provide sustainable portfolio income, diversification, and inflation hedging [1] - The recent market rally has led to total returns, but there are concerns about unrealized capital gains potentially disappearing as the market approaches bubble territory [2] - Dividends are highlighted as a reliable source of income that cannot be taken back, contrasting with the volatility of capital gains [2] Group 2 - The article emphasizes the importance of defensive stocks for medium- to long-term investment horizons [2]

Core Viewpoint - Capital Southwest Corporation has announced a public offering of $350 million in 5.950% notes due 2030, with a yield-to-maturity of 6.104% [1][2]. Group 1: Offering Details - The notes will mature on September 18, 2030, and can be redeemed at par plus a "make-whole" premium before August 18, 2030 [1]. - The offering price is set at 99.345% of the aggregate principal amount of the notes [1]. - The offering is expected to close on September 18, 2025, subject to customary closing conditions [1]. Group 2: Use of Proceeds - The net proceeds from the offering will be used to redeem the outstanding 7.75% Notes due 2028 and 3.375% Notes due 2026 [2]. - A portion of the proceeds will also be used to repay outstanding indebtedness under the Corporate Credit Facility and/or the SPV Credit Facility [2]. - The company plans to re-borrow under these facilities to make investments aligned with its investment objectives and for general corporate purposes [2]. Group 3: Underwriters - Deutsche Bank Securities Inc., ING Financial Markets LLC, Morgan Stanley & Co. LLC, SMBC Nikko Securities America, Inc., and Wells Fargo Securities, LLC are acting as active bookrunners for the offering [3]. - Citizens JMP Securities, LLC and Raymond James & Associates, Inc. are serving as passive bookrunners [3]. - B. Riley Securities, Inc., Oppenheimer & Co. Inc., and UBS Investment Bank are co-managers for the offering [3]. Group 4: Company Overview - Capital Southwest Corporation is a Dallas-based business development company with approximately $1.8 billion in investments at fair value as of June 30, 2025 [7]. - The company focuses on middle market lending, supporting acquisitions and growth of businesses with investments ranging from $5 million to $50 million [7]. - As a public company with a permanent capital base, Capital Southwest has the flexibility to provide creative financing solutions [7].

Group 1 - The article emphasizes the importance of creating a portfolio that generates income without the need for selling assets, aiming to alleviate the stress of retirement investing [1] - It highlights the role of mortgage-backed securities in the US housing market, which support homeownership for millions of families [2] - The service offers features such as model portfolios with buy/sell alerts, preferred and baby bond portfolios for conservative investors, and regular market updates, focusing on community and education [2] Group 2 - The article mentions that the contributors and analysts involved have beneficial long positions in specific securities, indicating a vested interest in the performance of those investments [3] - It notes that recommendations are closely monitored, with buy and sell alerts provided exclusively to members, suggesting a proactive investment strategy [4] - The article clarifies that past performance does not guarantee future results, and no specific investment advice is being given, highlighting the independent nature of the analysis [5]

Core Viewpoint - Capital Southwest Corporation has declared monthly regular dividends of $0.1934 per share for October, November, and December 2025, along with a quarterly supplemental dividend of $0.06 per share payable in December 2025 [1][2]. Dividend Details - The regular monthly dividends for the quarter ending December 31, 2025, are scheduled as follows: - October 31, 2025: $0.1934 per share [2] - November 28, 2025: $0.1934 per share [2] - December 31, 2025: $0.1934 per share [2] - The total regular dividends per share for the quarter will amount to $0.58, with the supplemental dividend adding an additional $0.06, leading to total dividends of $0.64 per share for the quarter [2]. Dividend Reinvestment Plan - Capital Southwest offers a Dividend Reinvestment Plan (DRIP) that allows registered stockholders to automatically reinvest dividends into additional shares of the company's common stock [3]. Company Overview - Capital Southwest Corporation is a Dallas-based business development company with approximately $1.8 billion in investments at fair value as of June 30, 2025 [4]. - The company focuses on middle market lending, providing investments ranging from $5 million to $50 million across various capital structures, including first lien, second lien, and non-control equity co-investments [4]. - As a public company with a permanent capital base, Capital Southwest has the flexibility to offer creative financing solutions and support the long-term growth of its portfolio companies [4].

Group 1 - Business Development Companies (BDCs) are increasingly becoming integral to income investment strategies, previously viewed as riskier investments but gaining traction among investors in recent years [1] - The sector represented by BDCs, indicated by the BIZD ticker, has shown growth and acceptance among investors [1] Group 2 - The article emphasizes the importance of due diligence for investors, highlighting that the author is not a registered investment professional or financial advisor [2] - The author aims to assist lower and middle-class workers in building investment portfolios focused on high-quality, dividend-paying companies [2]

Group 1 - The article discusses investment opportunities in two Business Development Companies (BDCs): Great Elm Capital Corporation (NASDAQ: GECC) and Capital Southwest [1] - The focus is on investments that can yield good profits in a short time frame [1] - The investing group Trade With Beta offers features such as frequent picks for mispriced preferred stocks and baby bonds, weekly reviews of over 1200 equities, IPO previews, and hedging strategies [1] Group 2 - The article emphasizes the importance of active investor participation and provides a platform for discussion among sophisticated traders and investors [1] - There is a mention of a beneficial long position in the shares of GECC, indicating a positive outlook on the stock [1]

Treading Softly, Beyond Saving, Philip Mause, and Hidden Opportunities, all are supporting contributors for High Dividend Opportunities. Any recommendation posted in this article is not indefinite. We closely monitor all of our positions. We issue Buy and Sell alerts on our recommendations, which are exclusive to our members. 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 inv ...

PART I FINANCIAL INFORMATION [Item 1. Consolidated Financial Statements](index=4&type=section&id=Item%201.%20Consolidated%20Financial%20Statements) Unaudited consolidated financial statements for Capital Southwest Corporation for the quarter ended June 30, 2025, are presented [Consolidated Statements of Assets and Liabilities](index=4&type=section&id=Consolidated%20Statements%20of%20Assets%20and%20Liabilities) Total assets marginally decreased to $1.88 billion, while net assets increased to $916.5 million as of June 30, 2025 Consolidated Balance Sheet Highlights (in thousands, except per share data) | Metric | June 30, 2025 (Unaudited) | March 31, 2025 | | :--- | :--- | :--- | | **Total Investments (at fair value)** | $1,780,198 | $1,785,299 | | **Total Assets** | $1,882,412 | $1,882,840 | | **Total Liabilities** | $965,938 | $999,207 | | **Total Net Assets** | $916,474 | $883,633 | | **Net Asset Value per Share** | $16.59 | $16.70 | [Consolidated Statements of Operations](index=5&type=section&id=Consolidated%20Statements%20of%20Operations) Total investment income increased to $55.9 million, with net assets from operations rising to $27.0 million for the quarter ended June 30, 2025 Quarterly Operating Results (in thousands, except per share data) | Metric | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | | :--- | :--- | :--- | | **Total Investment Income** | $55,947 | $51,354 | | **Total Operating Expenses** | $23,230 | $20,068 | | **Net Investment Income** | $31,889 | $28,859 | | **Net Realized Gain on Investments** | $15,704 | $711 | | **Net Unrealized Depreciation on Investments** | $(20,592) | $(15,535) | | **Net Increase in Net Assets from Operations** | $27,001 | $14,035 | | **Net Increase in Net Assets from Operations – Basic EPS** | $0.50 | $0.31 | [Consolidated Statements of Changes in Net Assets](index=7&type=section&id=Consolidated%20Statements%20of%20Changes%20in%20Net%20Assets) Net assets increased by $32.8 million to $916.5 million, driven by operations and stock issuance, partially offset by dividends for the quarter Reconciliation of Net Assets (in thousands) | Description | Amount | | :--- | :--- | | **Net Assets at March 31, 2025** | **$883,633** | | Issuance of common stock | $41,172 | | Dividends to shareholders | $(35,344) | | Net investment income | $31,889 | | Net realized gain on investments | $15,704 | | Net unrealized depreciation on investments | $(20,592) | | Other (Share-based comp, etc.) | $12 | | **Net Assets at June 30, 2025** | **$916,474** | [Consolidated Statements of Cash Flows](index=8&type=section&id=Consolidated%20Statements%20of%20Cash%20Flows) Net cash from operating activities was $30.5 million, with a net increase in cash of $3.7 million, ending the quarter at $48.5 million Summary of Cash Flows (in thousands) | Cash Flow Activity | Three Months Ended June 30, 2025 | | :--- | :--- | | **Net Cash Provided by Operating Activities** | $30,493 | | **Net Cash Used in Investing Activities** | $(141) | | **Net Cash Used in Financing Activities** | $(26,684) | | **Net Increase in Cash** | $3,668 | | **Cash, Cash Equivalents and Restricted Cash at End of Period** | $48,539 | [Consolidated Schedule of Investments](index=9&type=section&id=Consolidated%20Schedule%20of%20Investments) The investment portfolio totaled $1.78 billion across 122 companies, with debt investments comprising 90.7% as of June 30, 2025 Portfolio Composition by Investment Type at June 30, 2025 (in thousands) | Investment Type | Fair Value | % of Total Portfolio | | :--- | :--- | :--- | | First lien loans | $1,595,338 | 89.6% | | Second lien loans | $17,383 | 1.0% | | Subordinated debt | $1,264 | 0.1% | | Preferred equity | $66,230 | 3.7% | | Common equity & warrants | $96,526 | 5.4% | | Earnout | $3,457 | 0.2% | | **Total** | **$1,780,198** | **100.0%** | Top 5 Industry Concentrations at June 30, 2025 (by Fair Value) | Industry | Fair Value (in thousands) | % of Total Portfolio | | :--- | :--- | :--- | | Healthcare Services | $207,499 | 11.7% | | Consumer Products | $156,589 | 8.8% | | Media & Marketing | $147,986 | 8.3% | | Consumer Services | $130,230 | 7.3% | | Food, Agriculture & Beverage | $123,570 | 7.0% | [Notes to Consolidated Financial Statements](index=56&type=section&id=Notes%20to%20Consolidated%20Financial%20Statements) Detailed notes explain accounting policies, investment valuation, debt facilities, and unfunded commitments, highlighting BDC and RIC status - The company operates as an internally managed Business Development Company (BDC) and has elected to be treated as a Regulated Investment Company (RIC) for U.S. federal income tax purposes[116](index=116&type=chunk) - As of June 30, 2025, investments on non-accrual status represented approximately **0.8% of the total investment portfolio at fair value** and **2.6% at cost**[136](index=136&type=chunk) - As of June 30, 2025, the company had total unfunded commitments of **$223.0 million**, consisting of **$222.4 million in debt** and **$0.5 million in equity**[257](index=257&type=chunk)[259](index=259&type=chunk) [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=99&type=section&id=Item%202.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management discusses performance, financial condition, and capital resources, noting a 10.5% increase in net investment income and strong liquidity Quarterly Performance Summary | Metric | Q1 FY2026 (ended Jun 30, 2025) | Q1 FY2025 (ended Jun 30, 2024) | Change | | :--- | :--- | :--- | :--- | | **Total Investment Income** | $55.9M | $51.4M | +8.9% | | **Net Investment Income** | $31.9M | $28.9M | +10.5% | | **Net Increase in Net Assets from Operations** | $27.0M | $14.0M | +92.4% | - The increase in investment income was primarily due to a **21.7% increase in the average cost basis of debt investments** held year-over-year, from **$1.38 billion to $1.67 billion**[310](index=310&type=chunk) - As of June 30, 2025, the company had **$46.9 million in unrestricted cash** and **$397.2 million of unused capacity** under its Credit Facilities[324](index=324&type=chunk) [Item 3. Quantitative and Qualitative Disclosures About Market Risk](index=112&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) Primary market risk is interest rate risk, with 96.3% of the debt portfolio at floating rates, and sensitivity analysis provided - As of June 30, 2025, approximately **96.3% of the company's debt investment portfolio at fair value** bore interest at floating rates, with **100% of these subject to contractual minimum interest rate floors**[347](index=347&type=chunk) Interest Rate Sensitivity Analysis (as of June 30, 2025) | Basis Point Change | Increase (decrease) in Net Investment Income (in thousands) | Increase (decrease) in Net Investment Income per Share | | :--- | :--- | :--- | | (200 bps) | $(25,548) | $(0.46) | | (100 bps) | $(12,807) | $(0.23) | | 50 bps | $6,403 | $0.12 | [Item 4. Controls and Procedures](index=114&type=section&id=Item%204.%20Controls%20and%20Procedures) Disclosure controls and procedures were effective as of June 30, 2025, with no material changes in internal control over financial reporting - The President and Chief Executive Officer and the Chief Financial Officer concluded that the company's disclosure controls and procedures are effective as of June 30, 2025[350](index=350&type=chunk) - No changes in internal control over financial reporting occurred during the quarter that materially affected, or are reasonably likely to materially affect, internal controls[351](index=351&type=chunk) PART II OTHER INFORMATION [Item 1. Legal Proceedings](index=115&type=section&id=Item%201.%20Legal%20Proceedings) The company reports no currently pending material legal proceedings - The company has no currently pending material legal proceedings[353](index=353&type=chunk) [Item 1A. Risk Factors](index=115&type=section&id=Item%201A.%20Risk%20Factors) No material changes to risk factors were reported since the last Annual Report on Form 10-K - No material changes to risk factors were reported since the last Annual Report on Form 10-K[354](index=354&type=chunk) [Item 2. Unregistered Sales of Equity Securities and Use of Proceeds](index=115&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) No sales of unregistered securities or share repurchases occurred during the quarter ended June 30, 2025 - There were no sales of unregistered securities during the quarter[355](index=355&type=chunk) - The company did not repurchase any shares under its share repurchase program during the three months ended June 30, 2025[356](index=356&type=chunk) [Item 3. Defaults Upon Senior Securities](index=115&type=section&id=Item%203.%20Defaults%20Upon%20Senior%20Securities) The company reports no defaults upon its senior securities during the period - None[357](index=357&type=chunk) [Item 4. Mine Safety Disclosures](index=115&type=section&id=Item%204.%20Mine%20Safety%20Disclosures) This item is not applicable to the company - Not applicable[358](index=358&type=chunk) [Item 5. Other Information](index=115&type=section&id=Item%205.%20Other%20Information) No other material information or director/officer trading plans were reported during the period - No director or officer entered into any Rule 10b5-1 trading plans or other trading arrangements during the quarter[360](index=360&type=chunk) [Item 6. Exhibits](index=116&type=section&id=Item%206.%20Exhibits) This section lists exhibits filed with the Form 10-Q, including corporate governance documents, indentures, and required certifications