DIVIDEND POLICY AND FINANCIAL PERFORMANCE OF LISTED MANUFACTURING FIRMS IN NIGERIA

Abstract

The dividend decision-making process is widely considered one of the most important financial decisions that the finance managers face. Based on this, this research paper investigated the impact of dividend policy on the financial performance of the listed manufacturing companies in Nigeria. Having a population of thirty-three (33) firms, both in the Industrial and Consumer goods sectors, a sample of twenty (22) firms was however, used in the study. The research design was an ex-post facto study and used a panel data of two hundred and twenty (220) pooled observations collected among twenty-two (22) companies that are listed in the Industrial Exchange group and consumer product groups listed on the Nigerian Exchange Group within a time span of ten (10) years (2015-2024). The analysis of the data was however, done using E-views 10.0 statistics package with help of a multiple regression technique employed on a panel. The research results indicated that dividend per share, dividend yield, dividend pay-out ratio and dividend growth rate have significant positive (Coeff. =0.0671 {0.0027}), significant positive (Coeff. =0.1056 {0.0123}), significant negative (Coeff. = -0.0145 {0.0292}) and non-significant positive (Coeff. = 0.2043 {0.8767}), positive effect on earnings per share of listed manufacturing companies in Nigeria. It also showed that dividend cover ratio significantly and positively (Coeff. = 0.325 {0.0221}) influences the earnings per share of listed manufacturing companies in Nigeria. It was concluded at 5% level of significance thus that dividend policy has significant effects on the financial performance of listed manufacturing firms in Nigeria. It was recommended, among others that companies should strive to achieve an optimal dividend yield that balances shareholders' interests and the company's growth goals by periodically reviewing dividend payments and adjusting them based on the company's financial performance.