DIVIDEND POLICIES AND FINANCIAL PERFORMANCE OF LISTED CONSUMER GOODS FIRMS IN NIGERIA

Abstract

This study empirically investigated dividend policy and financial performance of quoted consumer goods firms in Nigeria with a view to determine, ascertain and investigate those explanatory variables such as dividend yield, dividend payout ratio, dividend stability ratio and return on equity. This study depends mainly on secondary data for the analysis of the study. The population of the study consists of twenty-one (21) consumer goods firms listed or quoted at the Nigerian Stock exchange as at 27^th of January 2024 while the sample size consists of six (6) consumer goods companies and they were selected based on availability of data (2015 - 2019). Ex-post facto research design was adopted for this study considering that the research is an after the fact study. The annual time series secondary data used (2015 - 2019) were lifted from the annual accounts and financial statements of the selected quoted or listed firms. The data generated was analyzed using multiple regression techniques with the help of statistical software called Statistical Package for Social Science (SPSS). At the end of the collection of the research data, they were subjected to a battery of test and the following findings reveal the following: Dividend Yield (DY) significantly impact positively on Return on equity of the selected quoted consumer goods firm in Nigeria with a beta coefficient of 0.538; Dividend payout ratio (DPR) has a negative significantly impact on Return on equity of the selected quoted consumer goods firm in Nigeria by affecting the amount of earnings retained within the company after paying higher dividends to shareholders; Dividend stability ratio (DSR) of the quoted consumer goods firms in Nigeria has a positive impact on return on equity with a beta coefficient of 0.537. Based on the findings of the study, the following recommendations were made: The management of Nigerian consumer goods firms should consider maintaining or increasing dividend payouts to enhance return on equity and attract more investors; The management of Nigerian consumer goods firms should evaluate the dividend payout ratio to strike a balance between rewarding shareholders and retaining earnings for future growth; The management of Nigerian consumer goods firms should maintain a consistent dividend payment pattern to signal stability and sustainably reward shareholders without compromising future growth prospects i.e. There should be consistent dividend policy that will maximize shareholders wealth without mortgaging the profitability objectives of the firms.