Effect of Earning Variables on Stock Returns of Foods and Beverage Manufacturing Firms in Nigeria (A Case Study of UAC Plc 2012--2021)

Abstract

The study examined the effect of earning variables on stock returns of foods and beverage manufacturing firms in Nigeria with reference to UAC plc (2012-2021). The study specifically examined the effect of profit for the year on dividend yield of food and beverage companies in Nigeria, the effect of return on assets on dividend yield of food and beverage companies in Nigeria and also the effect of return on equity on dividend yield of food and beverage companies in Nigeria. Three research questions and hypotheses were formulated in line with the stated objectives. The study made use of expose facto research design, data for the study were sourced through annual reports and accounts of UAC Plc. data collected were analysed using multiple regression, result of the analysis shows that Profit for the year has positive and significant effect on dividend yield food and beverage companies in Nigeria. It was also observed that return on asset have significant effect on dividend yield food and beverage companies in Nigeria. The study further revealed that return on equity have significant effect on dividend yield food and beverage companies in Nigeria. Based on the findings, the study recommended among others that an optional stock return payout should be determined with the firm’s investment opportunities and any preference that investors have for dividend as opposed to capital gain. If considerable attention is not given to this issue, the shareholders might become frustrated and consequently lead to mass disposal of their stocks. Such a situation often leads to a downward trend in the price of stocks. The study concluded that the theory of valuation of income streams has a central and honoured place in the finance doctrine