Impact of Profitability on Dividend Policy of Listed Agricultural Companies of India

Abstract

This study assesses the effect of profitability on the dividend policy of listed selected agricultural companies of India. The population of the study consists of eight(8) listed agricultural companies. Secondary data is collected from the sampled firms through their published audited financial statements for 15 years ranging from 2007-2023. The ex-post facto research design was adopted with descriptive analysis and regression analysis to determine the effect of explanatory variables. The results show that earnings per share, return on equity and return on assets have a positive correlation but insignificant effect on dividend policy. Based on the findings, the study concludes that the dividend policy has the probability of influencing the profitability of listed agricultural companies of India. The study also recommends that the companies should adopt policy and strategy on efficient use of their assets that would enable them to generate profits to meet up with dividends payment regularly to attract more investors. This is because investors assume that a firm which pays dividend regularly is an evidence that the company is healthy financially.