EFFECT OF DIVIDEND POLICY ON FIRMS PERFORMANCE OF LISTED OIL AND GAS FIRMS IN NIGERIA

The objective of dividend policy is to determine the allocation of the company's current profits between retained earnings and shareholder payouts. In this context, the study investigated the impact of dividend policies on the business performance of listed oil and gas companies in Nigeria. Specifically, the study aimed to assess the influence of return on asset (ROA), dividend payout ratio (DPR), earnings per share (EPS), and dividend per share (DPS).Employing a correlational research design, the sample size consisted of seven out of the ten oil and gas companies listed on the Nigerian Exchange Group as of December 31, 2022, selected through purposive sampling procedures. Data spanning a decade (2013 to 2022) were extracted from the annual reports and accounts of these seven listed companies. The Ordinary Least Squares (OLS) linear regression model was applied to analyze the data using STATA 13 software. The study's findings revealed a cumulative R2 of 0.0859, indicating that 8% of the variance in the financial performance of listed oil and gas companies could be attributed to the overall contribution of the independent variables. The study suggested that the return on assets of listed oil and gas companies in Nigeria is negatively influenced by dividend per share (DPS), though not significantly. Additionally, it found a significant positive impact of earnings per share (EPS) on the return on assets. The analysis also indicated a negligible negative impact of the Dividend Payout Ratio (DPR) on the return on assets. Based on the study's recommendations, the management of listed oil and gas companies in Nigeria should focus on enhancing managerial techniques and exploring strategies for optimal resource utilization to maximize returns. Moreover, the study suggests that continuously increasing the dividend payment ratio would signify financial soundness, thereby maximizing shareholder wealth and firm value for listed oil and gas companies in Nigeria.

1 29 Mar, 2024

pg: 13

JBMIC PORTAL SYSTEM

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