Dividend Policy and Market Performance of Listed Oil and Gas Firms in Nigeria

Abstract

Dividend policy has long been the subject of debate and discussion among experts, particularly with regard to its impact on market performance. Some argue that dividend policy influences market performance based on Bird in-hand theory, whereas others dispute this claim. The study looked at how Nigerian listed oil and gas companies' market performance was impacted by their dividend policies. The study used an ex-post facto research methodology, and the population consisted of all ten (10) oil and gas companies listed on the Nigerian Exchange Group as of December 31, 2023. The sample size was seven (7) companies, and filtering sampling techniques were applied. For the eleven (11) years between 2012 and 2022, information was taken from the annual reports and accounts of seven (7) Nigerian listed oil and gas companies. Following the completion of several diagnostic tests, including the Shapiro-Wilk Normality Test, Pearson Correlation, Variance Inflation Factor (VIF), Heteroscedasticity Test, and Hausman Specification Test, the hypotheses were assessed using a random effect regression model. The results demonstrated that the share price of Nigerian listed oil and gas companies is positively impacted insignificantly by dividends per share, dividend payout ratio, and dividend yield. Among other things, the report suggested that management of Nigerian listed oil and gas companies implement the best dividend policy possible, which would benefit shareholders in the near and distant future. The report also suggested that oil\ and gas companies should create plans to optimize stockholder value while preserving financial stability and make better-informed decisions about dividend payouts.