Dividend policy and market share price of listed industrial goods companies in Nigeria

https://doi.org/10.35912/ijfam.v7i2.2897
Published: Sep 9, 2025

Abstract:

Purpose: The study examined the effect of dividend policy on market share price of listed industrial goods companies in Nigeria. Dividend policy was measured using dividend per share, dividend yield, and dividend payout ratio.

Methodology/approach: The study adopted an ex-post facto research design. Data were sourced from audited financial reports of nine sampled industrial goods companies listed in Nigeria, covering the period 2014–2023. The hypotheses were tested using Panel Pooled Regression Analysis with White cross-section standard errors and covariance.

Results/findings: Findings revealed a positive and significant effect of dividend per share (p=0.0000) and dividend payout ratio (p=0.0339) on market share price, while dividend yield (p=0.0007) exerted a negative but significant effect. Dividend policy variables jointly explained about 78% of the variation in market share price, indicating their strong explanatory power.

Conclusions: The study concluded that proper dividend policy increases the market share price of listed industrial goods companies. Managers and boards should strive to achieve a steady increase in dividend per share, as it enhances market value, but without undermining firm sustainability.

Limitations: The study focused only on listed industrial goods companies in Nigeria, which limits the generalizability to other sectors or unlisted firms.

Contribution: This research contributes to the literature by providing empirical evidence on the contrasting effects of dividend policy components on share prices in an emerging economy context. By covering a recent ten-year period, it offers fresh insights into how dividend signals are interpreted differently by shareholders, thereby supporting the design of sector-specific financial strategies.

Keywords:
1. Dividend Payout Ratio
2. Dividend Per Share
3. Dividend Policy
4. Dividend Yield
5. Market Share Price
Authors:
1 . Michael Ugochukwu Uche
Ebonyi State University, Abakaliki, Nigeria
2 . Felix N. Awa
Ebonyi State University, Abakaliki, Nigeria
3 . Joseph Ogwu Elom
Ebonyi State University, Abakaliki, Nigeria
4 . Peter Ifeanyi Okwu
Alex Ekwueme Federal University, Ndufu-Alike, Ikwo, Ebonyi State, Nigeria
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How to Cite
Uche , M. U., Awa, F. N., Elom, J. O., & Okwu, P. I. . (2025). Dividend policy and market share price of listed industrial goods companies in Nigeria. International Journal of Financial, Accounting, and Management, 7(2), 229–244. https://doi.org/10.35912/ijfam.v7i2.2897
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Issue & Section
Vol. 7 No. 2 (2025): September
Articles
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This work is licensed under a Creative Commons Attribution-ShareAlike 4.0 International License.

Author Biographies

Michael Ugochukwu Uche , Ebonyi State University, Abakaliki, Nigeria

Postgraduate Student

Felix N. Awa, Ebonyi State University, Abakaliki, Nigeria

Lecturer

Joseph Ogwu Elom, Ebonyi State University, Abakaliki, Nigeria

Lecturer

Peter Ifeanyi Okwu, Alex Ekwueme Federal University, Ndufu-Alike, Ikwo, Ebonyi State, Nigeria

Lecturer

References

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    Agila, M., & Jerinabi, U. (2018). Dividend policy and its impact on shareholder’s wealth and firm performance: A study of listed cement companies. IOSR Journal of Business and Management, 20(9), 28-31.

    Alajekwu, U. B., & Ezeabasili, V. N. (2020). Dividend policy and stock market price volatility in the Nigerian stock market. British Journal of Management and Marketing Studies, 3(4), 37-52.

    Araoye, F. E., Aruwaji, A. M., & Ajya, E. O. (2019). Effect of dividend policy on stock price volatility in Nigeria Stock Exchange. International Journal of Accounting and Financial Reporting, 9(2), 219-231. doi:https://doi.org/10.5296/ijafr.v9i2.11861

    Aribaba, F., Ahmodu, O., Ogbeide, S., & Olaleye, J. (2017). Dividend policy and share price changes in the stock market: Evidence from Nigeria. Journal of Business and Organizational Development, 9(4), 30-47.

    Baskin, J. (1989). Dividend policy and the volatility of common stocks. Journal of portfolio Management, 15(3), 19.

    Chelimo, J. K., & Kiprop, S. K. (2017). Effect of dividend policy on share price performance: a case of listed insurance companies at the Nairobi securities exchange, Kenya. International Journal of Accounting, Finance and Risk Management, 2(3), 98-106. doi:https://doi.org/10.11648/j.ijafrm.20170203.12

    Efenyumi, P.-M. E., & Nworie, G. O. (2025). Tax planning and shareholder wealth maximization among listed banks in Nigeria. management, 7(1), 91-104. doi:https://doi.org/10.35912/ijfam.v7i1.2756

    Ehikioya, B. (2015). An empirical investigation of the impact of dividend policy on the performance of firms in developing economies: Evidence from listed firms in Nigeria. International Journal Of Finance And Accounting, 4(5), 245-252.

    Emeka, O., & Ogochukwu, O. (2021). Impact of dividend policy on share price of listed ICT firms in Nigeria. International Journal of Academic Research in Business and Social Sciences, 11(9), 1489-1502. doi:https://doi.org/10.6007/ijarbss/v11-i9/8937

    Franc-Dbrowska, J., & M?dra-Sawicka, M. (2020). Determinants of dividend payout decisions–the case of publicly quoted food industry enterprises operating in emerging markets. Economic research-Ekonomska istraživanja, 33(1), 1108-1129. doi:https://doi.org/10.1080/1331677X.2019.1631201

    Hossin, M. S., & Ahmed, M. F. (2020). Dividend policy and stock price volatility in the Bangladesh capital market: An experimental analysis. Saudi Journal of Economics and Finance, 4(7), 359-367. doi:https://doi.org/10.36348/sjef.2020.v04i07.008

    Koleosho, A. O., Akintoye, I. R., & Ajibade, A. T. (2022). The effect of dividend policy on share price volatility of some selected companies on the Nigerian exchange. Journal of Accounting, Business and Finance Research, 15(1), 10-20. doi:https://doi.org/10.55217/102.v15i1.525

    Michael, A. O. (2019). Dividend decision and economic value added of quoted Nigeria manufacturing firms. American Economic & Social Review, 5(2), 45-59. doi:https://doi.org/10.46281/aesr.v5i2.363

    Murniati, S., Mus, H. A. R., Semmaila, H. B., & Nur, A. N. (2019). Effect of investment decisions, financing decisions and dividend policy on profitability and value of the firm. International Journal of Accounting & Finance in Asia Pasific (IJAFAP), 2(1), 1-10. doi:https://doi.org/10.32535/ijafap.v2i1.359

    Nissim, D., & Ziv, A. (2001). Dividend changes and future profitability. The Journal of finance, 56(6), 2111-2133. doi:https://doi.org/10.1111/0022-1082.00400

    Njiforti, P. (2015). Impact of the 2007/2008 global financial crisis on the stock market in Nigeria. CBN Journal of Applied Statistics, 6(1), 49-68.

    Nwaiwu, J., & Ali, S. (2018). Speaking theorists and searching for facts: Dividend policy and share price in Nigeria. International Journal of Advanced Academic Research, 4(2), 56-78.

    Nweze, A., & Nwadialor, E. (2020). Effect of social and environmental disclosures on performance of nonfinancial firms in Nigeria. Journal of Accounting and Financial Management, 6(1), 40-58.

    Nworie, G. O., Oduche, I. J., & Cyril-Nwuche, O. F. (2024). Signaling Theory in Action: How Dividends Affect Shareholder Investment Decisions in Nigerian Deposit Money Banks. Asian Journal of Economics, Business and Accounting, 24(7), 506-515. doi:https://doi.org/10.9734/ajeba/2024/v24i71426

    Nworie, G. O., Okafor, T. G., & John-Akamelu, C. R. (2022). Firm-level traits and the adoption of computerised accounting information system among listed manufacturing firms in Nigeria. Journal of Global Accounting, 8(3), 128-148.

    Nwufo, C. I., & Yusuf, L. (2021). Effects of dividend policy on market share price of listed industrial goods companies in Nigeria. International Journal of Innovative Research and Advanced Studies (IJIRAS), 8(11), 14-21.

    Obayagbona, J., & Akinuli, B. O. (2024). Dividend Policy And Financial Performance Of Consumer Goods Companies In Nigeria. International Journal of Novel Research and Development (IJNRD), 9(4), 77-95.

    Ofulue, I., Okike, J. O., Nworie, G. O., & Nworie, F. N. (2025). Corporate liquidity as a predictor variable of firm earnings in the Nigerian agricultural sector. International Journal of Financial, Accounting, and Management, 7(1), 77-89. doi:https://doi.org/10.35912/ijfam.v7i1.2788

    Ogbuagu, N. M. (2020). Effect of dividend policy on firm’s performance. Journal of Accounting, Business and Social Sciences, 3(2), 2672-4235.

    Okafor, C. A., Mgbame, C., & Chijoke-Mgbame, A. (2011). Dividend policy and share price volatility in Nigeria. Journal of research in national development, 9(1), 202-210.

    Oniyama, M. E., Adebayo, S., & Ogundajo, G. O. (2021). Dividend policy and market performance of listed manufacturing companies in Nigeria. Journal of Accounting and Finance, 21(2), 82-95. doi:https://doi.org/10.33423/jaf.v21i2.4241

    Ozo, F. K., Irem, C. O., Okereafor, G., Nwogo, J. E., Nwambeke, G. C., & Oyekezie, K. S. (2024). Managers' perception of dividend policy in Nigerian firms. African Journal of Accounting, Auditing and Finance, 8(4), 405-424. doi:https://doi.org/10.1504/AJAAF.2024.140570

    Sarwar, M. S. (2013). Effect of dividend policy on share holders wealth: a study of sugar industry in Pakistan. Global Journal of Management and Business Research Finance, 13(7), 47-54.

    Stephen, E. A., & Okoro, E. G. (2014). Determinants of stock price movement in Nigeria:(evidence from the Nigerian stock exchange). Journal of Economics and sustainable Development, 5(3), 1-7.

    Tandon, K., & Malhotra, N. (2013). Determinants of stock prices: Empirical evidence from NSE 100 companies. International Journal of Research in Management & Technology, 3(3), 2249-9563.

    Ugwu, C. C., Onyeka, V. N., & Okwa, I. E. (2020). Dividend policy and corporate financial performance: evidence from selected listed consumer goods firms in Nigeria. Journal of Economics and Business, 3(3).

    Uniamikogbo, E., Ezennwa, E., & Bennee, E. (2018). Influence of accounting information on stock price volatility in Nigeria. Accounting and taxation review, 2(4), 113-124.

    Uwuigbe, U., Jafaru, J., & Ajayi, A. (2012). Dividend policy and firm performance: A study of listed firms in Nigeria. Journal of Accounting and Management Information Systems (JAMIS), 11(3), 442-454.

    Yusof, Y., & Ismail, S. (2016). Determinants of dividend policy of public listed companies in Malaysia. Review of International Business and Strategy, 26(1), 88-99. doi:https://doi.org/10.1108/RIBS-02-2014-0030

  1. Abu, S. O., & Adebayo, E. (2019). Effect of dividend policy on the share price of listed conglomerate firms in Nigeria. African Journal of Management Research, 26, 39-55.
  2. Agila, M., & Jerinabi, U. (2018). Dividend policy and its impact on shareholder’s wealth and firm performance: A study of listed cement companies. IOSR Journal of Business and Management, 20(9), 28-31.
  3. Alajekwu, U. B., & Ezeabasili, V. N. (2020). Dividend policy and stock market price volatility in the Nigerian stock market. British Journal of Management and Marketing Studies, 3(4), 37-52.
  4. Araoye, F. E., Aruwaji, A. M., & Ajya, E. O. (2019). Effect of dividend policy on stock price volatility in Nigeria Stock Exchange. International Journal of Accounting and Financial Reporting, 9(2), 219-231. doi:https://doi.org/10.5296/ijafr.v9i2.11861
  5. Aribaba, F., Ahmodu, O., Ogbeide, S., & Olaleye, J. (2017). Dividend policy and share price changes in the stock market: Evidence from Nigeria. Journal of Business and Organizational Development, 9(4), 30-47.
  6. Baskin, J. (1989). Dividend policy and the volatility of common stocks. Journal of portfolio Management, 15(3), 19.
  7. Chelimo, J. K., & Kiprop, S. K. (2017). Effect of dividend policy on share price performance: a case of listed insurance companies at the Nairobi securities exchange, Kenya. International Journal of Accounting, Finance and Risk Management, 2(3), 98-106. doi:https://doi.org/10.11648/j.ijafrm.20170203.12
  8. Efenyumi, P.-M. E., & Nworie, G. O. (2025). Tax planning and shareholder wealth maximization among listed banks in Nigeria. management, 7(1), 91-104. doi:https://doi.org/10.35912/ijfam.v7i1.2756
  9. Ehikioya, B. (2015). An empirical investigation of the impact of dividend policy on the performance of firms in developing economies: Evidence from listed firms in Nigeria. International Journal Of Finance And Accounting, 4(5), 245-252.
  10. Emeka, O., & Ogochukwu, O. (2021). Impact of dividend policy on share price of listed ICT firms in Nigeria. International Journal of Academic Research in Business and Social Sciences, 11(9), 1489-1502. doi:https://doi.org/10.6007/ijarbss/v11-i9/8937
  11. Franc-Dbrowska, J., & M?dra-Sawicka, M. (2020). Determinants of dividend payout decisions–the case of publicly quoted food industry enterprises operating in emerging markets. Economic research-Ekonomska istraživanja, 33(1), 1108-1129. doi:https://doi.org/10.1080/1331677X.2019.1631201
  12. Hossin, M. S., & Ahmed, M. F. (2020). Dividend policy and stock price volatility in the Bangladesh capital market: An experimental analysis. Saudi Journal of Economics and Finance, 4(7), 359-367. doi:https://doi.org/10.36348/sjef.2020.v04i07.008
  13. Koleosho, A. O., Akintoye, I. R., & Ajibade, A. T. (2022). The effect of dividend policy on share price volatility of some selected companies on the Nigerian exchange. Journal of Accounting, Business and Finance Research, 15(1), 10-20. doi:https://doi.org/10.55217/102.v15i1.525
  14. Michael, A. O. (2019). Dividend decision and economic value added of quoted Nigeria manufacturing firms. American Economic & Social Review, 5(2), 45-59. doi:https://doi.org/10.46281/aesr.v5i2.363
  15. Murniati, S., Mus, H. A. R., Semmaila, H. B., & Nur, A. N. (2019). Effect of investment decisions, financing decisions and dividend policy on profitability and value of the firm. International Journal of Accounting & Finance in Asia Pasific (IJAFAP), 2(1), 1-10. doi:https://doi.org/10.32535/ijafap.v2i1.359
  16. Nissim, D., & Ziv, A. (2001). Dividend changes and future profitability. The Journal of finance, 56(6), 2111-2133. doi:https://doi.org/10.1111/0022-1082.00400
  17. Njiforti, P. (2015). Impact of the 2007/2008 global financial crisis on the stock market in Nigeria. CBN Journal of Applied Statistics, 6(1), 49-68.
  18. Nwaiwu, J., & Ali, S. (2018). Speaking theorists and searching for facts: Dividend policy and share price in Nigeria. International Journal of Advanced Academic Research, 4(2), 56-78.
  19. Nweze, A., & Nwadialor, E. (2020). Effect of social and environmental disclosures on performance of nonfinancial firms in Nigeria. Journal of Accounting and Financial Management, 6(1), 40-58.
  20. Nworie, G. O., Oduche, I. J., & Cyril-Nwuche, O. F. (2024). Signaling Theory in Action: How Dividends Affect Shareholder Investment Decisions in Nigerian Deposit Money Banks. Asian Journal of Economics, Business and Accounting, 24(7), 506-515. doi:https://doi.org/10.9734/ajeba/2024/v24i71426
  21. Nworie, G. O., Okafor, T. G., & John-Akamelu, C. R. (2022). Firm-level traits and the adoption of computerised accounting information system among listed manufacturing firms in Nigeria. Journal of Global Accounting, 8(3), 128-148.
  22. Nwufo, C. I., & Yusuf, L. (2021). Effects of dividend policy on market share price of listed industrial goods companies in Nigeria. International Journal of Innovative Research and Advanced Studies (IJIRAS), 8(11), 14-21.
  23. Obayagbona, J., & Akinuli, B. O. (2024). Dividend Policy And Financial Performance Of Consumer Goods Companies In Nigeria. International Journal of Novel Research and Development (IJNRD), 9(4), 77-95.
  24. Ofulue, I., Okike, J. O., Nworie, G. O., & Nworie, F. N. (2025). Corporate liquidity as a predictor variable of firm earnings in the Nigerian agricultural sector. International Journal of Financial, Accounting, and Management, 7(1), 77-89. doi:https://doi.org/10.35912/ijfam.v7i1.2788
  25. Ogbuagu, N. M. (2020). Effect of dividend policy on firm’s performance. Journal of Accounting, Business and Social Sciences, 3(2), 2672-4235.
  26. Okafor, C. A., Mgbame, C., & Chijoke-Mgbame, A. (2011). Dividend policy and share price volatility in Nigeria. Journal of research in national development, 9(1), 202-210.
  27. Oniyama, M. E., Adebayo, S., & Ogundajo, G. O. (2021). Dividend policy and market performance of listed manufacturing companies in Nigeria. Journal of Accounting and Finance, 21(2), 82-95. doi:https://doi.org/10.33423/jaf.v21i2.4241
  28. Ozo, F. K., Irem, C. O., Okereafor, G., Nwogo, J. E., Nwambeke, G. C., & Oyekezie, K. S. (2024). Managers' perception of dividend policy in Nigerian firms. African Journal of Accounting, Auditing and Finance, 8(4), 405-424. doi:https://doi.org/10.1504/AJAAF.2024.140570
  29. Sarwar, M. S. (2013). Effect of dividend policy on share holders wealth: a study of sugar industry in Pakistan. Global Journal of Management and Business Research Finance, 13(7), 47-54.
  30. Stephen, E. A., & Okoro, E. G. (2014). Determinants of stock price movement in Nigeria:(evidence from the Nigerian stock exchange). Journal of Economics and sustainable Development, 5(3), 1-7.
  31. Tandon, K., & Malhotra, N. (2013). Determinants of stock prices: Empirical evidence from NSE 100 companies. International Journal of Research in Management & Technology, 3(3), 2249-9563.
  32. Ugwu, C. C., Onyeka, V. N., & Okwa, I. E. (2020). Dividend policy and corporate financial performance: evidence from selected listed consumer goods firms in Nigeria. Journal of Economics and Business, 3(3).
  33. Uniamikogbo, E., Ezennwa, E., & Bennee, E. (2018). Influence of accounting information on stock price volatility in Nigeria. Accounting and taxation review, 2(4), 113-124.
  34. Uwuigbe, U., Jafaru, J., & Ajayi, A. (2012). Dividend policy and firm performance: A study of listed firms in Nigeria. Journal of Accounting and Management Information Systems (JAMIS), 11(3), 442-454.
  35. Yusof, Y., & Ismail, S. (2016). Determinants of dividend policy of public listed companies in Malaysia. Review of International Business and Strategy, 26(1), 88-99. doi:https://doi.org/10.1108/RIBS-02-2014-0030