DIVIDEND PAYOUT AND PERFORMANCE OF CONSUMER GOODS MANUFACTURING FIRMS IN NIGERIA

Abstract

The role played by dividend payout in the discourse of firm’s performance has not achieved wide consensus, owing to diverse empirical findings in literature. Hence, this study examined the impact of dividend payout onperformance of consumer goods manufacturing firms in Nigeria.The study focused on ten (10) firms over the period between 2008 and 2017. Secondary data were obtained from the financial reports of firms sampled. Panel based estimation techniques including pooled OLS, fixed effect and random effect were employed.Result revealed that dividend payout ratio (DPR) and dividend per share (DPS)which were used as measures of dividend payout exert positive but insignificant impact on return on capital employed (ROCE) with coefficient estimates of (0.0168714, p=0.996 > 0.05) and (0.1397063, p=0.716 > 0.05)for DPR and DPS respectively. The study concluded that increase in dividend payout has the tendency to trigger firm performance especially when measured in terms of ROCE. Hence, management of consumer goods manufacturing firms in Nigeria should be objective in their design of dividend payout framework such that investors’ perception of the value of the firm will not hamper the prospect of improved overall performance.