Looking for Dividends and Growth? This 7% Yield Could Be Great for Your Portfolio

Student Transportation Inc. (TSX:STB)(NASDAQ:STB) provides investors with an attractive yield of just under 7.2%, and unlike most dividend stocks, the company has excellent growth prospects.

The company provides school bus transportation services, and it’s a service that will be stable for years to come. As the population continues to expand, demand will only continue to rise as more students will require transportation to and from school.

Aside from driver-less technologies, it’s hard to imagine a lot of disruption for Student Transportation. The company focuses on safety, and that’s also why autonomous vehicles might still be a tough sell to parents. While self-driving vehicles developed by Tesla Inc (NASDAQ:TSLA) might work for commercial purposes, it will likely take much longer for those solutions to be implemented by schools.

For that reason, Student Transportation feels like a fairly safe stock for the foreseeable future. In three years, the company’s sales have grown more than 30%.

The one challenge for Student Transportation is that its low margins mean that the company’s bottom line is very thin, and so this investment is mainly for growth and dividend investors. For value investors, the company’s stock will likely trade at multiples too high to be considered a good buy.

However, as Student Transportation continues to expand, it’s financial health will likely improve as well. Back in November, the company acquired HopSkipDrive, a ridesharing service based in Los Angeles as a way to further diversify its services.

Student Transportation may not be the best value buy, but it gives dividend investors a great opportunity to buy a great growth stock with a high yield.