Topic: How To Invest

Pat: Would you have any Inner Circle feedback on Student Transportation?

Article Excerpt

A: Student Transportation Inc., $7.82 symbol STB on Toronto (Shares outstanding: 91.9 million; Market cap: $716.9 million; www.ridesta.com), is North America’s third-largest school bus operator, with almost 13,500 vehicles in Canada and the U.S. In its fiscal year ended June 30, 2016, revenue rose 8.2%, to $600.2 million from $554.8 million a year earlier (all figures except share price and market cap in U.S. dollars). Student Transportation reported cash flow of $64.4 million, up 7.7% from $59.8 million. Cash flow per share fell 1.5%, to $0.67 from $0.68, on more shares outstanding. The company pays a monthly dividend of $0.0367 U.S. for a yearly payout of $0.44 a share. That gives the stock a high 7.3% yield. Student Transportation’s dividend appears sustainable for now—it paid out just 59% of its cash flow as dividends in the latest year. However, the company operates in a competitive industry now dealing with a..