Dividend Payout Trend: An analysis of Listed Manufacturing Firms in Nigeria

Abstract

The ultimate motive behind every investment is to get a reasonable return. However, firms act as if they have a certain mark Dividend Payout Rate or Ratio (DPR), but do not always apply it to each year's earnings. The investigation evaluates the trend in DPRs among listed manufacturing firms in Nigeria, intending to understand the dividend payout pattern. The research’s population comprises sixty-three firms quoted on the Nigerian stock exchange (NSE) between 2009 and 2019. The sample size of fifty-one was selected using a filter. The selected corporations' annual reports and financial accounts from 2009 to 2019 were used. The study uses trend analysis as an estimation method. This study confirms that listed manufacturing companies have a low but steady dividend payout ratio. This study observes cases of negative DPRs and a decrease in DPR. The decline is significant and has resulted in a hurdle in the DPR. This paper offers an insight into the shareholders of manufacturing companies in Nigeria. That trend analyzing DPR is a good measure of how well a company performs financially. In view of elements such as market fluctuation, the need for reinvestment for expansion purposes, and how a corporation is recognized in the share market. Hence, prospective shareholders want a complete assessment of the corporation’s performance rather than just judging the company based on its annual dividend payout ratios.