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ABSTRACT
The study empirically examined the determinants of dividend payout decision of eleven (11) manufacturing firms listed on the floor of the Nigerian Exchange Limited (NGX) for the period 2017 to 2023 (7 years). The specific objectives of the study were to find out whether profitability (PRO), firm size (FSIZ), earnings stability (ESTAB) and leverage (LEV) significantly impact dividend payout decisions of manufacturing firms in Nigeria. For this reason, the correlation coefficient, descriptive statistics and the panel data econometric techniques were adopted in the analysis of data. On the basis of the random effects approach, the results indicate that profitability (PRO) had a significant negative impact on dividend payout ratio; leverage (LEV) had a significant positive impact on dividend payout ratio; while earnings stability (ESTAB) and firm size (FSIZ) do not have any significant impact on dividend payout ratio of manufacturing firms in Nigeria in the period under investigation. The study conclude that, in the determination of dividend payout ratio of manufacturing firms in Nigeria, profitability (PRO) and leverage (LEV) are the major factors to be considered and monitored by the management and indeed regulators. The study therefore recommends among others that, shareholders and board of directors should be very proactive and put in place measures that will enable them to consistently monitor the activities of managers to ensure that project with positive net present value are embark on. This will help to improve the overall net profit of the firm from where dividend are paid. Also, management and regulators are to place close attention of the leverage aspect of every manufacturing firms in the country due to its ability to enhance the level of payout ratio to shareholders.
