Payout Ratio Research Articles

Kebijakan Deviden Menjadi Moderasi Profitabilitas, Leverage, Free Cash Flow Terhadap Price to Book Value Industri Makanan, Minuman dan Farmasi Tahun 2018 - 2023

The purpose of this study is to analyze and obtain empirical evidence on the impact of profitability, leverage, and free cash flow on firm value through dividend policy in companies within the Food, Beverage, and Pharmaceutical subsector from 2018 to 2023. The research was conducted on 18 companies using purposive sampling for the period 2018-2023. The data analysis method used was panel data regression, employing Structural Equation Modeling (SEM) with Stata 17 software. The results of the study reveal the following Return on Equity (ROE) has a significant positive effect on Price to Book Value (PBV), Debt-to-Equity Ratio (DER) has a positive but not significant effect on PBV, Free Cash Flow (FCF) has a positive but not significant effect on PBV, Dividend Payout Ratio (DPR) has a significant positive effect on PBV, ROE has a significant positive indirect effect on firm value (PBV) through dividend policy, DER has a negative but not significant indirect effect on PBV through dividend policy, FCF has a positive but not significant indirect effect on PBV through dividend policy. These findings suggest that while profitability, as measured by ROE, directly and indirectly enhances firm value, leverage and free cash flow do not show significant direct or indirect effects on firm value within the observed period and subsector.

Managerial overconfidence and dividend policy: a case study of PSX listed firms

PurposeA company’s dividend policy is determined not just by its strategy but also by the qualities of its managers, particularly overconfidence. As a result, the purpose of this study is to explore the impact of CEO overconfidence on dividend policy using the dividend payout ratio and dividend yield ratio.Design/methodology/approachThe study’s sample includes 170 non-financial enterprises listed on the Pakistan Stock Exchange between 2011 and 2022. Furthermore, we used corporate governance and firm-specific factors as control variables. The fixed effect model based on the Hausman test result and dynamic system GMM estimation technique was employed in the analysis. Furthermore, the dividend dummy variable and alternative proxies of dividend payments are used to ensure the results are robust.FindingsThe findings indicate that CEOs’ overconfidence positively impacts dividend payout and dividend yield ratios. Further analysis reveals that board size and remuneration committee significantly impact dividend payment among corporate governance control variables, while block holding has a negative effect. Among firm-specific control variables, the results suggest that firm size, profitability, and market-to-book ratio are significantly positively associated. In contrast, the coefficient of variation and debt ratio are inversely associated with dividend payments.Practical implicationsManagerial overconfidence benefits shareholders by increasing dividend payouts, but firms may struggle in the long run if they do not have adequate retained earnings to meet capital requirements. Dividends and retained earnings must be balanced to make enough funds available for long-term investment in capital-intensive projects.Originality/valueAlthough little previous research has focused on the managerial overconfidence-dividend policy relationship, the authors believe this is the first study to test this relationship generally in emerging markets, particularly Pakistan.

The Impact of Corporate Social Responsibility on Banking Financial Performance with Good Corporate Governance

This study was conducted to determine the effect of Corporate Social Responsibility (CSR) on Financial Performance with Good Corporate Governance (GCG) as a moderating variable in banking companies listed on the Indonesia Stock Exchange. The independent variable used in this study is CSR which is measured through 5 indicators including Dividend Payout Ratio, Staff Expenses Rate, Interest Payment Rate, Tax Proportion, and Proportion of Public Welfare Donation. The dependent variable used in this study is Financial Performance which is measured in 3 dimensions, namely the growth dimension with 4 indicators, profitability with 3 indicators, and risk management with 3 indicators. The moderating variable used in this study is GCG which is measured through the proportion of institutional ownership, managerial ownership, and foreign ownership. The population in this study are banking companies listed on the Indonesia Stock Exchange during the 2018-2022 period. The type of research is quantitative testing. The sampling technique used is purposive sampling and 13 banking companies were obtained. This study uses PLS (Partial Least Square) analysis with the SmartPLS 3.0 application. Based on the results of the study, it shows that CSR has a significant positive effect on Financial Performance and GCG is unable to moderate the relationship between CSR and Financial Performance.

The Role of ESG (Environmental, Social, Governance) on Dividends and Firm Value: The Moderation Effect of Audit Quality

<p>This research will examine the influence of ESG (Environmental, Social, Governance) and its components on dividends and firm value. Furthermore, the quality and credibility of information in the market will also influence stakeholder assessments. The important role of audit quality in providing assurance on this information is needed. By using multiple linear regression on 252 firm years from companies listed in IDX 2020-2023 that meet the sample criteria, it was found that ESG has not been able to significantly influence dividends and firm value. However, environmental can influence dividends in a positive way, while governance can influence firm value in a negative way. Even though dividends and audit quality can influence firm value in a positive way, audit quality still cannot increase the influence of dividends on firm value. Audit quality also cannot increase the influence of ESG on dividends. In this case, inefficient ESG practices followed by poor audit quality are the main factor of this insignificant influence. It takes time for ESG investments to influence company performance, which has an impact on high dividend payout ratios and firm value.</p>

Exchange Rate, Dividend Policy, and Capital Structure: Their Impact on Stock Returns in Jakarta Islamic Index Companies (2019–2023)

This study aims to analyze the impact of exchange rates, dividend policies, and capital structures on stock returns of JII-listed companies from 2019-2023, considering unique characteristics and adherence to Sharia principles. This study uses a qualitative method, employing purposive sampling techniques to determine the sample and then analyzing it using multiple linear regression with the SPSS 25.0 application. The sample in this study consists of 23 companies listed on the IDX that are included in the JII index and are non-bank companies. The results of this study found that the exchange rate has a positive effect on stock return. Dividend policy, measured using the dividend payout ratio (DPR), has a negative and significant effect on stock return. Capital structure, measured using the debt to equity ratio (DER), has a negative and significant effect on stock return. Meanwhile, simultaneously, the variables of exchange rates, dividend policies, and capital structures have a significant effect on stock return. The findings provide valuable insights for investors and companies seeking to make informed investment decisions and develop effective financial strategies aligned with Sharia principles. The study contributes academically to sharia-based finance literature and offers practical implications for market participants in the Islamic capital market.

Corporate financial strategies and performance: Insights from China’s Shanghai Stock Exchange

This study investigated the impact of corporate financial strategies-(CFSs) on the performance of companies listed on the Shanghai Stock Exchange-(SSE) from 2010-2023, analyzing data from 2,269 firms, yielding 31,766 balanced firm-year observations. Utilizing a mixed-methods approach with a quasi-experimental design grounded in pragmatism, the inquiry employed two-step System-GMM technique to address endogeneity, simultaneity, heteroscedasticity, reverse causality and Nickell bias. Fixed effects-(FE) and random effects-(RE) models were applied to handle unobserved heterogeneity, omitted variable bias and guarantee robustness. The results revealed that, total-debt-to-assets-ratio-(TDTAR) and dividend yield-(DY) significantly and negatively impacted firm performance-(FP), measured by return on assets-(ROA) and Tobin’s Q-(TQ). Contrary, cash conversion cycle-(CCC), current ratio-(CR), total-assets-turnover-(TAT), tangibility-(TANG), total-equity-to-total-assets ratio-(TETAR), dividend payout ratio-(DPR), firm size-(SIZE), and firm age-(AGE) had a significantly positive effect on FP-(ROA and TQ). The study emphasizes the importance of effective CFSs in improving FP and offers insights for policymakers, investors, and managers, highlighting the need for corporate deleveraging, capital structure optimization and efficient asset and working capital management. Although focused on China, the study’s framework is applicable to other emerging markets, providing valuable theoretical, conceptual, and methodological insights as it integrates CFS metrics into the resource-based view theory-(RBVT), extending the theory’s scope making it more robust and generalizable.

DIVIDEND POLICY AND VALUE OF THE FIRM

This study examine the impact of dividend policy on value of manufacturing firms in Nigeria. The study used statistical records for years 2014-2023 as secondary data. Panel data with the use of regression analysis was used to estimate the data collected during the period of this study. The variables used include enterprise value, dividend cover, and dividend yield and dividend payout ratio. From the analysis of the study, it is observed that dividend cover had insignificant effect on enterprise value since the p-value of 0.4151 was greater than 0.05, dividend yield had insignificant effect (p-value = 0.2112) on enterprise value and dividend payout had insignificant effect (p-value=0.9412) on enterprise value. Based on the above findings, the study recommended that Companies have to adopt the form of dividend payment that is favourable to the growth of the organization since the form of the dividend payment is directly proportional to the growth of firms in Nigeria.

The Role of Profitability and Dividend Policy in Mediated and Moderate the Company Growth Relationship with Firm Value

This study aims to determine the effect of Company Growth proxied by Earnings Growth (X) on Firm Value proxied by Price to Book Value (Y) through Profitability proxied by Return on Asset (Z) as a mediating variable and Dividend Policy proxied by Dividend Payout Ratio (M) as a moderating variable in Insurance Sub-Sector Companies listed on the Indonesia Stock Exchange for the period 2015 - 2021. The population used in this study were all Insurance Sub-Sector companies listed on the Indonesia Stock Exchange for the period 2015 - 2021. The sample of this study amounted to 11 companies from 14 total populations using purposive sampling method. The data analysis technique used in this research is Partial Least Square with the help of SmartPLS 3.0 software. The results of this study indicate that: (1) Company Growth has a positive and significant effect on Profitability, (2) Company Growth has no effect on Firm Value, (3) Profitability has a positive and significant effect on Firm Value, (4) Profitability is able to mediate the relationship between the effect of Company Growth on Firm Value, (5) Dividend Policy is unable to moderate the relationship between the effect of Company Growth on Firm Value.

Assessment of Dividend Payout Ratios in Nepalese Commercial Banks: A Buddhism Perspective

Buddhism ethics in investment and profit distribution emphasize compassion, non-harm, ethical conduct, generosity, and avoidance of greed, guiding Nepalese banks toward balanced, sustainable, and ethical operations. The dividend payout ratio shows how much of a company's earnings after tax are distributed to shareholders, indicating profitability and boosting shareholder trust. The board of directors sets the dividend policy, including payment frequency and amount, based on company performance. The study titled, assessment of dividend payout ratios in Nepalese commercial banks from a Buddhist perspective analyzes three prominent banks (NBL, RBB, and ADB) from 2012/13 to 2021/22. These banks were chosen for their strong fundamentals and popularity among investors. The study used secondary data from annual reports and employed statistical and financial tools like descriptive statistics, correlation, and regression analysis to evaluate their performance and investment appeal. From a Buddhism perspective, the investment and dividend mechanisms should align with ethical considerations. The analysis shows that banks with higher growth and earnings per share tend to have higher dividend payouts, but the overall complexity and variability suggest that mindful and ethical financial decisions are crucial.

Exploring the Impact of Bank-Specific Internal Factors on the Profitability: A Study of the Banking Sector of Nepal

This study aims to investigate the impact of bank-specific internal factors on the profitability of the banks. The study, which employed an explanatory research technique, used secondary data from major sample merger commercial banks' annual reports for fiscal years 2014 to 2022. The population consists of 20 scheduled banks, with a sample of five merged banks selected purposefully. Bank size, liquidity ratio, dividend payout ratio, capital adequacy ratio and non-performing loans ratio are the five independent variables that the study uses to analyze the association between Return on asset, the dependent variable. The study used descriptive statistics, multiple regression models, and MS Excel for data analysis. The findings indicate that both BS and NPLR have a noteworthy detrimental impact on ROA, whereas LR has a considerable beneficial effect. However, the results revealed no statistical significance for CAR and DPR. The study concludes that among the internal factors analyzed, LR is the most influential factor on bank profitability. These findings provide valuable insights for regulators, bank management, and other stakeholders, highlighting areas for potential performance improvement. The inclusion of macroeconomic aspects with the potential to impact the profitability of Nepalese banks should be further examined.

The Effects of Agency Problems and Dividend Policy on the Asymmetric Behaviour of Selling, General and Administrative Expenses: Does Ownership Structure Matter?

This article investigates the effects of agency problems and dividend policy on the asymmetric behaviour of Selling, General, and Administrative (SG&A) expenses, with an emphasis on Korean business ownership structures. Employing a robust dataset of 4,279 observations from the Korean Composite Stock Price Index from 2011 to 2021, our empirical investigation combined multiple regression models such as OLS, fixed effects, random effects and the Generalised Method of Moments (GMM) to contain endogeneity problems. The research objectives include the examination of the relationship between SG&A cost asymmetry and agency problems, the impact of dividend policy on SG&A costs, and the intervening function of Korean business ownership structures, particularly Chaebols. Unexpectedly, the results reveal that higher free cash flow is linked to lower SG&A cost asymmetry, suggesting that agency concerns can be mitigated in such corporations. Improved asset utilisation increases cost asymmetry, whereas larger operating expenses reduce asymmetry. Furthermore, higher cash dividends and payout ratios are associated with reduced SG&A cost asymmetry, which contradicts the premise that dividend constraints correlate with a higher degree of cost asymmetry. According to ownership structure analysis, Chaebols' concentrated ownership results in stronger control over cash flow, eliminating cost asymmetry more efficiently than in non-Chaebol firms. These findings add to the literature on agency theory, cost behaviour, and corporate governance, providing managers and shareholders with beneficial insights. To promote business sustainability, improved handling of agency concerns and cost efficiency, this study recommends tailored corporate governance policies that takes ownership structures into account.

Stock Valuation: The Role of Financial Ratio In Cement Companies On The IDX 2012-2022

This research aims to explore the role of Current Ratio, Debt to Equity Ratio, Return on Equity, and Dividend Payout Ratio on Price to Book Value in cement companies listed on the Indonesia Stock Exchange during the 2012-2022 period. This research aims to provide a better understanding of the factors that influence share valuation in the cement industry in Indonesia. The data analysis method used is panel regression with a significance level of 0.05, and STATA software is used to analyze the data. The research results show that Debt to Equity Ratio (DER) and Dividend Payout Ratio (DPR) have a significant influence on Price to Book Value (PBV) in cement companies listed on the Indonesia Stock Exchange. DER describes the relationship between equity and debt in a company's financial structure, while DPR reflects the percentage of net profit paid as dividends to shareholders. An increase in DER or DPR can positively or negatively affect the valuation of cement company shares. Return on Equity (ROE) and Current Ratio (CR) were not found to have a significant influence on PBV. ROE measures the efficiency of using equity in generating profits, while CR shows the company's ability to meet short-term obligations with current assets. These findings provide a deeper understanding for investors, financial analysts and other stakeholders in measuring company value and understanding the factors that contribute to stock valuation in the capital market.

Does Profitability Moderate the Relationship Between the Leverage and Dividend Policy of Manufacturing Firms in Nigeria and South Africa?

This study examines the moderating role of profitability in the relationship between leverage and dividend policy in listed manufacturing firms in Nigeria and South Africa. Using a sample of 915 firm-year observations from 2013 to 2022, the analysis employs panel Tobit regression to manage the censored nature of dividend data, with logistic regression applied as a robustness check. The findings reveal a negative association between leverage and dividend payout ratio for Nigerian firms, while this association is less pronounced and statistically insignificant in South Africa, reflecting a more flexible financial environment. Profitability strengthens the leverage–dividend policy relationship in Nigeria, enabling firms to maintain dividends despite high leverage; however, this moderating effect is weaker in South Africa. These results underscore the importance of context-specific financial strategies, recommending that Nigerian policymakers improve access to affordable credit, while South African policymakers focus on sustaining market stability. This study advances the understanding of dividend policy in emerging markets by clarifying how leverage and profitability interact to shape dividend practices.

Pengaruh Company Growth, Komite Audit, Komisaris Independen, Cash Flow, dan Dividend Payout Ratio Terhadap Konservatisme Akuntansi

Conservatism is the principle of prudence in financial reporting where companies do not immediately recognize and measure asets and profits but immediately recognize losses and debts that may occur. This study aims to analyze the effect of company growth, audit committee, independen commissioners, cash flow, dividend payout ratio on accounting conservatism in non-financial companies listed on the Indonesian stock exchange for the period 2020-2022. The sampling technique used in this study was purposive sampling. A total of 273 companies that have met the criteria as observation units. The analysis method used is multiple linear regression analysis. The results of the study provide empirical evidence that the audit committee, independen commissioners, and dividend payout ratio affect accounting conservatism. While company growth and cash flow have no effect on accounting conservatism.

Analisis Signifikansi Pengaruh Dividend Payout Ratio, Earning Per Share dan Debt to Equity Ratio terhadap Return Saham

This study examines the influence of Dividend Payout Ratio (DPR), Earning Per Share (EPS), and Debt to Equity Ratio (DER) on Stock Returns in companies listed on the LQ45 Index of the Indonesia Stock Exchange (IDX) during the 2021–2023 period. Using a quantitative approach, this research analyzed data from annual financial reports of 22 companies selected through purposive sampling, with a total of 66 observations. Multiple linear regression analysis was employed to evaluate the relationships between variables. The results indicate that DPR and EPS have a positive and significant impact on Stock Returns, with respective p-values of 0.001. This suggests that higher dividends and improved financial performance significantly enhance stock returns. On the other hand, DER does not have a significant influence on Stock Returns. This study provides practical implications for companies to strengthen their dividend policies and financial performance to attract investors. Investors are recommended to use DPR and EPS as primary indicators in forming an optimal investment portfolio. The findings contribute to the theoretical literature on financial ratios and stock performance in developing markets and suggest opportunities for future research, including additional variables such as macroeconomic factors or market conditions, to enhance Stock Return prediction models.

Pengaruh Good Corporate Governance dan Investment Opportunity Set terhadap Kebijakan Dividen

Good Corporate Governance (GCG) is a guarantee that comes from the control system in a company which can be seen from the procedures of the independent board of commissioners (DKI), institutional ownership (KI), managerial ownership (KM), and audit committee (KA). Good governance can indicate that the company is able to ensure good management of the company's finances. Investment Opportunity Set is the value of the company which depends on the costs set by management for the future. If a company has many profitable investment opportunities, this will likely lead to a low dividend payout ratio. The population of this study was 84 food and beverage companies registered on the IDX. The sampling technique used was purposive sampling. The analysis technique used in this research is multiple linear regression. The results of this research show that managerial ownership, institutional ownership, audit committee, and investment opportunity set have a positive effect on dividend policy. Meanwhile, the board of commissioners has a negative influence on dividend policy. Further research can develop this research by using other variables which theoretically have an influence on dividend policy

The Effect of Profitability and Deviden Policy on Company Value (Case Study in the Healthcare Sector Listed on the Indonesia Stock Exchange 2019-2023)

This study examined the impact of sustainability and dividend policy on the value of healthcare companies listed on the Indonesia Stock Exchange (BEI) from 2019 to 2023. The dependent variable in this analysis was company value, represented by the Price to Earnings Ratio (PER), while the independent variables included sustainability, measured by Return on Assets (ROA), and dividend policy, expressed through the Dividend Payout Ratio (DPR). A linear regression analysis was employed using data derived from the companies' financial statements. The results revealed that sustainability had a significant positive effect on company value, and dividend policy also had a positive contribution. These findings offer valuable insights for both investors and management in formulating financial strategies to enhance the value of healthcare companies. This research is expected to contribute to the growth of financial literature and managerial practices in Indonesia

The Effect of Earnings Per Share (EPS), Price Earnings Ratio (PER), and Dividend Payout Ratio (DPR) on the Stock Price of PT Adaro Energy Indonesia Tbk

This study examines the influence of critical financial indicators on the stock price of PT Adaro Energy Indonesia Tbk, with particular emphasis on Earnings Per Share (EPS), Price Earnings Ratio (PER), and Dividend Payout Ratio (DPR) from 2008 to 2023. In the context of escalating global economic integration, organizations encounter significant competitive challenges, rendering financial performance analysis essential for strategic decision-making. Although much study has been conducted on financial ratios, limited studies comprehensively investigate the collective impact of these factors on stock prices within Indonesia's energy industry, particularly over an extended data range. This study employs a quantitative research methodology and multiple regression analysis, revealing that EPS strongly affects stock prices, underscoring its vital importance in shareholder value. The data demonstrate that both EPS and PER exert a substantial influence on stock prices independently, but DPR has no meaningful impact. EPS, PER, and DPR jointly exert a substantial effect, accounting for 65.6% of the volatility in stock prices. These insights enhance the comprehension of the significance of financial measures in stock valuation, offering strategic considerations for investors and corporate management in their decision-making processes.

ESG rating, corporate dividends policy, and the moderating role of corporate life cycle: Cross country study

AbstractThis article investigates the link between environmental, social, and governance performance (ESG) and dividend policy, as well as how likely the corporate life cycle might moderate this association. Using cross‐country data from 2010 to 2020, the findings of this study reveal that ESG has a favorable influence on corporate dividend payments as measured by dividend payout ratio, dividend yield, and dichotomous variable. This conclusion holds true when the three ESG pillars are examined independently on dividend policy measurements. Furthermore, this analysis reveals that the firm's life cycle stage moderates the association between ESG and corporate dividend policy, exhibiting a negative moderating impact. This study specifically reveals that the relationship between ESG and dividends is stronger for firms in the early stages of their life cycle than for those in the mature stages. This relationship applies to firms operating in developed economies compared to developing economies. The study findings particularly highlight the dynamic nature of the link between ESG and dividends, underlining that this relationship is dependent on the stage of a company's life cycle. Understanding this relationship may assist stakeholders, such as investors and management, in making educated decisions about dividend expectations and sustainable practices depending on the life cycle of a firm.

The Influence of Financial Performance on Profit Growth with Dividend Policy as a Moderating Variable in BUMN Banking Listed on the IDX for the 2019-2023 Period

The aim of this research is to obtain empirical evidence regarding the influence of company financial performance which is proportional to the current ratio, total assets turnover and return on assets. This research also tests dividend policy as a moderating variable which is proportional to the dividend payout ratio. The following study uses descriptive descriptive research methods with a quantitative approach. Secondary data contained in this study includes financial data from BBRI, BBNI, BMRI and BBTN for the 2019-2023 period. Data processing was carried out using the SPSS version 25 program. The results of this research show that simultaneously all variables in the research have an effect on financial growth. Individually, the variables CR and TATO have no influence, on the other hand, ROA has a significant influence. The DPR variable is able to moderate and strengthen the CR variable, on the other hand the DPR variable is not able to moderate the TATO and ROA variables on profit growth.