Dividend Pay-Out Policy and Company Financial Performance in Kenya

Abstract

This research is financed by the Stipendium Hungaricum Scholarship Programme

Abstract

Dividend Payout has been a pertinent issue for both organisations and investors. Most investors prefer to invest or retain their investments in companies which declare dividends regardless of their cash flows. Companies, therefore, strive to maintain dividend payment to send positive shockwaves to investors to promote investor confidence.  The objective of this study was, therefore, to ratify whether dividend payout is significant in making investment decisions. The study further sought to establish the implication dividend payment has on the financial performance of listed companies in the energy and petroleum sector in Kenya. The study used Secondary data from all the five listed companies in the energy and petroleum sector for the period 2007-2017. A descriptive design was deemed appropriate for the research. The dividend payout ratio was used as the independent variable of the study while Return on Equity and Return on Assets were the dependent variables of this study. Multiple regression analysis was used to determine relationships between the predictor and the dependent variable.

Keyword: Bankruptcy Prediction, Dividend Pay-out Ratio, Financial Performance, Ratio Analysis

DOI: 10.7176/RJFA/10-10-24

Publication date:May 31^st 2019