Important news for shareholders and potential investors in EQT Holdings Limited (ASX:EQT): The dividend payment of A$0.4 per share will be distributed into shareholder on 29 March 2018, and the stock will begin trading ex-dividend at an earlier date, 13 March 2018. What does this mean for current shareholders and potential investors? Below, I will explain how holding EQT Holdings can impact your portfolio income stream, by analysing the stock’s most recent financial data and dividend attributes. View our latest analysis for EQT Holdings

Here’s how I find good dividend stocks

When assessing a stock as a potential addition to my dividend Portfolio, I look at these five areas:

• Is it paying an annual yield above 75% of dividend payers?

• Has its dividend been stable over the past (i.e. no missed payments or significant payout cuts)?

• Has it increased its dividend per share amount over the past?

• Does earnings amply cover its dividend payments?

• Will it be able to continue to payout at the current rate in the future?

Does EQT Holdings pass our checks?

The current trailing twelve-month payout ratio for the stock is 85.89%, which means that the dividend is covered by earnings. However, going forward, analysts expect EQT’s payout to fall to 75.46% of its earnings, which leads to a dividend yield of 4.59%. However, EPS should increase to A$1.08, meaning that the lower payout ratio does not necessarily implicate a lower dividend payment. If there is one thing that you want to be reliable in your life, it’s dividend stocks and their constant income stream. Unfortunately, it is really too early to view EQT Holdings as a dividend investment. It has only been consistently paying dividends for 2 years, however, standard practice for reliable payers is to look for a 10-year minimum track record. Relative to peers, EQT Holdings produces a yield of 3.90%, which is on the low-side for Capital Markets stocks.

Next Steps:

Whilst there are few things you may like about EQT Holdings from a dividend stock perspective, the truth is that overall it probably is not the best choice for a dividend investor. But if you are not exclusively a dividend investor, the stock could still be an interesting investment opportunity. Given that this is purely a dividend analysis, I recommend taking sufficient time to understand its core business and determine whether the company and its investment properties suit your overall goals. Below, I’ve compiled three relevant factors you should look at:

• Future Outlook: What are well-informed industry analysts predicting for EQT’s future growth? Take a look at our free research report of analyst consensus for EQT’s outlook.

• Valuation: What is EQT worth today? Even if the stock is a cash cow, it’s not worth an infinite price. The intrinsic value infographic in our free research report helps visualize whether EQT is currently mispriced by the market.

• Dividend Rockstars: Are there better dividend payers with stronger fundamentals out there? Check out our free list of these great stocks here.

To help readers see pass the short term volatility of the financial market, we aim to bring you a long-term focused research analysis purely driven by fundamental data. Note that our analysis does not factor in the latest price sensitive company announcements.

The author is an independent contributor and at the time of publication had no position in the stocks mentioned.