ABSTRACT
Dividend policy occupies a major role in the financial management of an organization. Dividend policy serves as a mechanism for control of a managerial opportunism. A number of factors affect dividend payout some of which are earnings, returns on equity, size, etc. Besides, the trade-off between dividend payout and retained earnings has always inspired quite a number of researches. The objective of the study is to examine the relationship between dividend payout and the performance trend of brewery sub-sector and find out whether relationship exists between the companies dividend payout and their performance.Earning Per Shares (EANPS) representing the company’s performance, while Investment (RIV), Firm size and Dividend Per Share (DDP) are explanatory variables. Data obtained were secondary data and were subjected to regression analysis (Statistical Package for Social Sciences - SPSS software and correlation analysis) and the findings indicate that; there is a positive connection between EPS (Earnings per share) and Dividend Per Share (DDP) in Guinness and Nigerian Breweries plc respectively. This shows that, the performance of the aforementioned companies influence Dividends per share. Also, there is a significant relationship between Investment (RIV) and Earnings per share (EANPS) in Nigerian Breweries Plc. This means that, Investment influence the performance of the company (Nigerian Breweries Plc). Furthermore, there is no significant relationship between Earnings per share (EANPS), investment (RIV) and Dividends per share (DDP) in Seven-up Bottling Company. This revealed that, performance of Seven-up Bottling Company has no significant impact on Dividends per share as well as investment. More so, there is a highly significant relationship between firm size and dividend payout in Guinness Nigeria Plc, Nigerian Brewery Plc and Seven-up Bottling Company respectively. Which strongly indicate that the firms’ size has influence on dividend payout. Due to the findings of this research, the following recommendations were made:Organizations should ensure that they have a good and robust dividend policy in place. This will enhance their profitability and attract investments to the organizations.Directors of corporate organizations should be made to update the records of shareholders including their next-of-kin to avoid a deliberate diversion or undue retention of unclaimed dividend warrants. Due procedures for the recognition and utilization of profit arising from investment of unclaimed dividend should be effected and properly accounted for. A more stringent level condition should be established to compel directors to only invest in profitable ventures, report the utilization of retention earnings through notes to the accounts. Government should put on their thinking cap on how to set up a body that will help to manage unclaimed dividends and also ensure that situations that give rise to such are minimized.
Keywords: Dividend Policy, Firm’s Performance, Earnings, Retained Earnings and Investment and Listed Brewery Companies.
