# STB - Student Transportation Inc.



## Flash (Nov 25, 2014)

Was looking at higher yield dividend stocks and came across STB.

I am looking to get my feet wet with them, and buy a few hundred shares ~2k worth or so. Their payout history looks promising, including the 08 crisis where they maintained their dividend payout. Also, their buses should continue being in demand as kids do need to go to school or field trips (Never personally used a cheese bus when I was a student but apparently they are pretty common). 

Only concern would be that I don't see this company increasing in value over the long term. We have negative population increase by birth, thus less and less kids will be using this service with the passing of time, altough I think currently Canada is positive in population increase (and thus kids increase) with the influx of immigrants.

Your thoughts? Any reasons I should stay away from it? This company is also in a sector I don't really have any exposure with my portfolio


----------



## lostwords (Feb 21, 2014)

I live in Ottawa and many schools here give out bus pass to students and not many are using the school buses other than elementary schools and schools in outer part of the city. did they pay out the Div in Jan and Feb? I didn't see it on google finance


----------



## CPA Candidate (Dec 15, 2013)

Stay away. The dividend is a distribution of debt and new equity issues, not earnings.

In the last 3 years combined they earned 10 cents in total EPS and paid $1.67 in dividends. Their balance sheet became increasingly leveraged as they used debt to support the dividend and just recently did 86 million dollar equity issues to keep the scheme afloat.


----------



## GoLong (Feb 21, 2015)

^ this. CFO (which I prefer to use to see sustainability) has come nowhere close to meeting the distributions once capex is included. In a few years if revenue continues then maybe the div. could become sustainable but that is pretty speculative. That's just my opinion, I haven't looked into it much.


----------



## CPA Candidate (Dec 15, 2013)

Here is STB total liabilities to equity ratio at June 30 (their year end) for 2012, 2013, 2014: 1.51, 1.64, 2.42 and at last report date Dec 31, 2014 - 3.03. You can see why they were forced to issue equity.

Shares outstanding in 2012, 2013, 2014: 84, 94, 101.

And now a new issue. Of course in the short term they are okay now that they have new money flowing in, but they also have more shares to pay dividends to.


----------



## Flash (Nov 25, 2014)

Thank you guys. Will steer clear.


----------

