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StoneMor Partners (STON -2.7%) responds to a recent drop in its share price on heavy volume that...

StoneMor Partners (STON -2.7%) responds to a recent drop in its share price on heavy volume that was kickstarted in part by a SA article that called into question many of the firm's business practices. In its defense, StoneMor details the source of its borrowing and the use of capital with a year-by-year comparison.
Comments (2)
  • wcpdcole
    , contributor
    Comments (2) | Send Message
     
    Looks like STON is a bargain at these prices.
    30 Jul 2012, 06:28 PM Reply Like
  • chanthirani
    , contributor
    Comments (465) | Send Message
     
    So was Enron.

     

    STON pays a nice dividend but the question being asked is where are the dividend payments coming from. If the dividend payout ratio is low then the dividend is sustainable. On the other hand, based on analyses by other SA authors, it appears that the dividend payout ratio is greater than 100% which in turn means that debt is being accumulated to pay for these dividend payments. How is the debt to be paid? By reducing future dividends? Or by issuing new shares which would dilute earnings and cause the overall share price to fall?
    8 Aug 2012, 10:00 AM Reply Like
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