Dividend Policy and Stock Market Performance of Listed Consumer Goods Firms in Nigeria

This study examined the effect of dividend policy son the stock market performance of listed Consumer Goods Firms in Nigeria. The study covered all 21 firms within the sector, with the Bird-in-Hand theory serving as the theoretical foundation. The scope spans 2014–2023, employing an ex-post facto research design. Secondary data were utilized and analyzed using descriptive statistics, correlation matrix, and multiple regression techniques. The results revealed that Dividend per Share (DPS) has an insignificant negative effect on stock market performance, while Dividend Yield (DY) exerts a positive and significant impact. Similarly, the Earnings-to-Price ratio (EP) demonstrated a positive significant effect, whereas the Retention Ratio (RR) showed a significant negative relationship with stock market performance. These findings suggest that dividend policy plays a critical role in shaping investors’ perceptions and influencing firm value. A stable and favorable dividend policy enhances stock market outcomes; however, balancing dividend payouts with retained earnings for reinvestment remains a challenge. The study recommends consistency in dividend distribution to build investor trust and encourage long-term investment. Additionally, firms should consider emphasizing Total Shareholder Return (TSR) which captures both dividends and capital gains, as a more comprehensive indicator of shareholder value.