Dividend Policy and Profitability of Agro Allied Companies in Nigeria (Published)
This study assesses the effect of dividend policy on the profitability of listed agro-allied companies in Nigeria. The population of the study consists of five (5) listed agro-allied companies on the Nigerian Stock Exchange as at 31/12/2018. All the listed agro-allied firms were used due to the small sample size. Secondary data were collected from the sampled firms through their published audited financial statements for 14 years ranging from 2005-2018. The ex-post facto research design was adopted with regression and descriptive analysis to determine the effect of explanatory variables. The results show that the return on assets has a positive and significant effect on dividend policy of listed agro-allied companies in Nigeria, while return on equity has a negative and significant effect on dividend policy of listed agro-allied companies in Nigeria but earnings per share have a negative and insignificant effect on dividend policy of listed agro-allied companies in Nigeria. Based on the findings, the study concludes that the dividend policy has the probability of influencing the profitability of listed agro-allied companies in Nigeria. The study, therefore, recommends that firms should adopt policy and strategy on efficient use of company assets that would enable them to generate profits to meet up with dividends payment regularly to attract more investors. This is because investors assume that a firm which pays dividend regularly is evidence that a company is healthy financially.
Keywords: Dividend Payout Ratio, Return on Assets, Return on Equity, and dividend retention ratio., earning per share