Dividend Payout and Future Earnings Growth

Zhou, Ping; Ruland, William

doi:10.2469/faj.v62.n3.4157

Cited by 66 publications

(100 citation statements)

References 16 publications

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“…A positive correlation was found between dividend changes and future profitability according to analyses made by Nissim and Ziv (2001), conducted using 100,666 dividends during the period 1963-1998, and Zhau and Ruland (2006, conducted using 40,968 dividends during the period 1950. Healy and Palepu (1988, conducted a study on distributing or withholding dividends for the period 1969-1989.…”

Section: Literature Reviewmentioning

confidence: 99%

“…Examples of studies that test the relation between dividends and future profitability include Watts (1973); Gonedes (1978); Penman (1984), Healy and Palepu (1988); Aharony and Dotan (1994), DeAngelo, DeAngelo and Skinner (1996); Bernartzi, Michaely and Thaler (1997); Nissim and Ziv (2001) ;Grullon, Michaely, Benartzi and Thaler (2005); Zhau and Ruland (2006); Hussainey (2009) ;Choi, Ju and Park (2011); Lee, Isa and Lim (2012);and Demontis (2013). While some of these studies conclude with results supporting the dividend signaling theory, some have reached contrary findings.…”

Section: Introductionmentioning

confidence: 99%

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Dividend Changes and Future Profitability: Evidence from the Turkish Stock Market

Kadioglu¹,

Ocal²

2016

IJEF

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Most of the previous studies on dividends in Turkey have focused on the effects of dividend announcements. There has been no study investigating the relation between dividend changes and the future profitability of firms. This study investigates this relation by using both ordinary and panel data regression on a data set consisting of 1,239 dividend payouts from 123 companies listed in Borsa Istanbul during the period 2004-2014. This study is unable to demonstrate that dividend changes are related to changes in future earnings. No evidence is found to support the dividend signaling theory, which claims that dividends serve as indicators of the future profitability of firms. On the other hand, future profitability is found to be strongly correlated with profitability in the previous year.

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Section: Literature Reviewmentioning

confidence: 99%

Section: Introductionmentioning

confidence: 99%

Dividend Changes and Future Profitability: Evidence from the Turkish Stock Market

Kadioglu¹,

Ocal²

2016

IJEF

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“…They found a positive relation between the dividend policy and the earnings of the market. Going forward in 2006, Zhou and Roland [3] extended this research on the individual companies listed on the S&P 500 index over a span of 50 years and applied several variables on the companies to find whether dividend payments have an impact on the future earnings of the company. They again found a positive relation between dividend payments of companies with respect to their earnings.…”

Section: E=(d/e)*(e/p)+gmentioning

confidence: 99%

“…Hence, the model of Arnott and Asness [1] extended by Zhou P and Ruland [3] is not applicable in Pakistani market due to different factors that prevail in developing markets which unlike are different from the developed market of US where the model was initially tested. Moreover, companies in Pakistan have not been paying a very high dividend in …”

Section: Theoretical Analysismentioning

confidence: 99%

The Study to Check the Applicability of Arnott and Asness Model on KSE 100 Index from 2005-2015

Zehra¹,

Altajjari²

2016

J Stock Forex Trad

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The purpose of this research is to find out the impact of dividend payments on the earnings of companies listed on Pakistan Stock Exchange. The sample includes firm listed on the Karachi Stock Exchange 100 index for a time period of 2005-2015. The model was applied where they refuted the conventional theory that said dividend payments do not affect future earnings of the company, on the aggregate U.S. Market (S&P 500). Our variables include size, return of asset, payout ratio, leverage taken by the company, earnings over price, past earnings growth, exchange rate and annual growth.This study holds importance in respect to finding out whether our results will vary after applying the model studied in the developed economy or it holds same results in the developing economies. One important insight that we aim to find out is whether companies, in order to maximize shareholder's wealth, should pay dividend or retain it back for further reinvestments.

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“…They therefore concluded that there is a positive relationship between dividend payout and future earnings, with the relationship stronger for future abnormal earnings. Zhou and Ruland (2006) used a multiple regression model to establish the relationship between dividend payout and future earnings growth. The key independent variable for their study was dividend payout.…”

Section: Empirical Evidencementioning

confidence: 99%

Does Dividend Policy Affect Firm Earnings? Empirical Evidence from Nigeria

Osamwonyi¹,

Lola-Ebueku²

2016

International Journal of Financial Research

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This study examines the effect of dividend policy on firm's returns using data of seventeen (17) manufacturing firms listed on the Nigerian stock Exchange. Employing descriptive statistics, correlation analysis and panel regression technique, where the fixed effect regression was adopted, the findings reveal that current dividend payout, growth opportunity of firms and dividend per share have positive and significant effect on earnings per share, with that of growth having an overwhelming influence. Current dividend payout and dividend per share are both significant at the 5percent level. One lagged dividend payout (previous dividend payout), cash flow and leverage have positive but not significant influence on EPS, while the impact of size is negative and not significant. The study recommends the implementation of effective and result-oriented dividend policies by financial managers of firms as well as sound investment, effective regulatory and supervisory framework by capital market regulators in order to enhance firms' earnings and performance in Nigeria.

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Dividend Payout and Future Earnings Growth

Cited by 66 publications

References 16 publications

Dividend Changes and Future Profitability: Evidence from the Turkish Stock Market

Dividend Changes and Future Profitability: Evidence from the Turkish Stock Market

The Study to Check the Applicability of Arnott and Asness Model on KSE 100 Index from 2005-2015

Does Dividend Policy Affect Firm Earnings? Empirical Evidence from Nigeria

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