Corporate Performance and Stock Prices of Nigerian Banks: A Panel Data Approach

Abstract

The main aim of the study was to determine the effect of corporate performance on stock prices of quoted Nigerian banks. The ex-post facto research design was adopted. This enabled the researcher make use of secondary data to determine the effect of earnings per share, dividend per share, return on equity and price earnings ratio on share prices of Nigerian banks. The following performance indicators: earnings per share, dividend per share, return on equity and price earnings ratio were the independent variables while the dependent variable were share prices. Data were sourced from the publication of the Nigeria Stock Exchange, Central Bank of Nigeria Statistical Bulletin and the annual reports of the various banks. The dependent and independent variables were observed over a period of eleven years, that is from 2007 to 2017. The analysis was a panel data analysis and were analyzed using the Ordinary Least Square (OLS) technique. The hypotheses were tested at 5% level of significance. The result revealed that earnings per share had a positive and significant impact on share prices, dividend per share had a positive and significant impact on share prices, return on equity had a positive and significant impact on share prices and price earnings ratio had a negative and non-significant impact on share prices.