TITLE:
Dividend Payout Effects on Firm Performance in Nigerian Oil and Gas Sector
AUTHORS:
Mahmood Omeiza Adeiza, Abubakar Sabo, Moshood Abdulrasheed Abiola
KEYWORDS:
Dividend Payout Ratio, Profitability Ratio, Firm Performance, ROE, ROA, Net Profit Margin
JOURNAL NAME:
Open Journal of Social Sciences,
Vol.8 No.7,
July
31,
2020
ABSTRACT: To address the need for more answers regarding effects of dividend payout
on firm performance of quoted oil and gas companies in Nigeria, this study set
out to ascertain the effect of Dividend Payout Ratio (DPR) on Net Profit Margin of quoted oil and gas companies, to determine
the effect of Dividend Payout Ratio (DPR) on the Return of Asset (ROA)
of quoted oil and gas companies as well as to identify the effect of Dividend
Payout Ratio (DPR) on the Return on Equity (ROE) of quoted oil and gas
companies. Accordingly, Ratio Analyses (Dividend Payout Ratio and Profitability
Ratio) were adopted as analytical tools for deciphering the relationship
between variables in the financial statement
of two oil and gas firms (Total Plc and Mobil Plc) to identify fundamental
trends and relationships that often cannot be noted by individual inspection of
components of the ratio. The research made use of secondary data obtained from financial reports of the companies. The study
found that Dividend Payout Ratio had a negative and insignificant effect
on firm performance of Mobil Plc and Total Plc in 2017 and 2018, while the
results showed significant effect in 2015 and 2016 for Total Plc, and significant
effect for Mobil Plc in 2015 but insignificant effect in 2016. Inclusively, the
study concluded that payment of dividend and the payout ratio conveys to
shareholders that the companies are profitable
and financially strong and recommended that managers: devote time to as well as
design dividend policies that will enhance financial performance and
shareholders’ value; and reduce company total debts to increase financial performance
of firms and shareholder value.