STUDENT TRANSPORTATION INC 5.25 PCT DEBS T.STB.DB.A

RE:keep drinking the cool aid boys

[Bigdaddy007]

Quoting Motley, August 21,2015 "Student Transportation Although Student Transportation Inc. (TSX:STB(NASDAQ:STB) has a long history of consistent dividends, its obvious the market isnt a believer in the sustainability of its 9.9% payout, as evidenced by the yield. On the surface, it would seem that Student Transportation would be the ideal dividend payer. There arent many businesses more steady or recession-proof than transporting kids to school. Government budgets are getting stretched tighter and tighter, making outsourcing things like student transport attractive. But Student Transportation hasnt generated enough in free cash flow to pay its dividend in years. Through the first nine months of the companys fiscal 2015, it generated $35 million in cash from operations, if you ignore changes in working capital. Add in $31 million in capital expendituresbuses do need to be repaired, after alland youre left with just $4 million in free cash flow. Meanwhile, the dividend has cost nearly $25 million during the same period."