Determinants of Dividend Policy of Listed Companies on the Nigerian Exchange Group
P. T. Iorshe, (Corresponding Author)
Dr. Moses Imoter Duenya, &
Prof. Ioraver Nyenger Tsegba Department of Accounting and Finance Joseph Sarwuan Tarka University, Makurdi.
The objective of the study was to examine the determinants of dividend policy of companies listed on the non-financial sector of the Nigerian Stock Exchange. Specifically, the study investigated the effect of firm age, firm growth and investment opportunities, institutional ownership, and financial leverage on dividend per share. The population of the study comprised of 69 companies from the non-financial sectors in Nigeria between 2010 and 2019. A sample size of 36 companies was drawn from the study population with four companies each from the Consumer Goods sector, Oil and Gas sector, Industrial sector, Agricultural sector, Conglomerate sector, Healthcare sector, ICT sector, Service sector and Natural resources sector. The study adopted the ex-post facto research design. Secondary data was employed for this study and sourced from Machameratios (www.machameratios.company.site). The pooled OLS regression technique was used for statistical analysis and results of the study showed that firm age, firm growth and investment opportunities, and institutional ownership are major positive determinants of dividend policy among the listed non-financial service companies in Nigeria. The results support the life cycle theory and clientele effect theory. Findings of the study further showed that firm financial leverage negatively and insignificantly determines dividend policy. The result of the study also showed that among the sampled non-financial subsectors, consumer goods has the highest dividend pay-out, this is followed by Oil and Gas sector, Industrial sector, Agricultural sector, Conglomerate sector, Healthcare sector, ICT sector, Service sector and Natural resources sector. The study, therefore, recommended, among others, that investors (especially institutional investors) whose main aim is to get dividend on their investment should be guided by the sectors with the highest level of dividend payment as disclosed above.
Keywords: Determinants, dividend, policy, non-financial sector, Nigerian Stock Exchange.