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ABSTRACT
This study empirically investigates the determinants of dividend payout ratio of newly listed firms in Nigeria. The study focuses on the new entrants (new listed firms) into the Nigerian Stock Exchange between 2013 and 2018.
The study uses data of newly listed firms that pay dividend during the period considered. Variables such as Net Profit Margin, Sales Growth, Assets Tangibility, Leverage and Ownership Concentration were considered as the explanatory variables while dividend payout ratio represents the response variable. Having conducted the necessary preliminary analyses of descriptive statistics and the unit root test, the Panel regression analysis was done to arrive at the findings.
The findings of the study show that the dividend payout ratio of newly listed firms in Nigeria is being determined by some factors. Factors such as Net Profit Margin and Leverage significantly affect Dividend Payout Ratio of Newly Listed Firms in Nigeria. While NPM exerts positive influence on DPR, LEV negatively impact DPR of Newly Listed Firms in Nigeria. Sales Growth, Asset Tangibility and Ownership Concentration do not have significant impact on DPR of Newly Listed Firms in Nigeria. It is therefore recommended that newly listed firms pay dividend as profit is made, which translate into investors’ (both existing and prospective) confidence and hence, increase the value of the firm. Also, newly listed firms should avoid being over-geared (highly levered) since this may give wrong signal to the investors alike; where a firm is too indebted and not paying dividend.
