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Event Hospitality & Entertainment Limited (ASX:EVT) has pleased shareholders over the past 10 years, by paying out dividends. The company is currently worth AU$2.2b, and now yields roughly 3.9%. Does Event Hospitality & Entertainment tick all the boxes of a great dividend stock? Below, I’ll take you through my analysis.

See our latest analysis for Event Hospitality & Entertainment

5 checks you should do on a dividend stock

If you are a dividend investor, you should always assess these five key metrics:

• Is it the top 25% annual dividend yield payer?

• Has it paid dividend every year without dramatically reducing payout in the past?

• 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?

How does Event Hospitality & Entertainment fare?

Event Hospitality & Entertainment has a trailing twelve-month payout ratio of 74%, which means that the dividend is covered by earnings. In the near future, analysts are predicting a payout ratio of 74% which, assuming the share price stays the same, leads to a dividend yield of 4.5%. Moreover, EPS should increase to A$0.81.

When considering the sustainability of dividends, it is also worth checking the cash flow of a company. A business with strong cash flow can sustain a higher divided payout ratio than a company with weak cash flow.

If there’s one type of stock you want to be reliable, it’s dividend stocks and their stable income-generating ability. EVT has increased its DPS from A$0.30 to A$0.52 in the past 10 years. It has also been paying out dividend consistently during this time, as you’d expect for a company increasing its dividend levels. This is an impressive feat, which makes EVT a true dividend rockstar.

In terms of its peers, Event Hospitality & Entertainment generates a yield of 3.9%, which is high for Entertainment stocks but still below the market’s top dividend payers.

Next Steps:

With this in mind, I definitely rank Event Hospitality & Entertainment as a strong dividend stock, and makes it worth further research for anyone who likes steady income generation from their portfolio. 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 important aspects you should further research: