Journal of
Accounting and Taxation

  • Abbreviation: J. Account. Taxation
  • Language: English
  • ISSN: 2141-6664
  • DOI: 10.5897/JAT
  • Start Year: 2009
  • Published Articles: 117

Full Length Research Paper

Accounting information and dividend payout prediction in Nigerian listed manufacturing firms

Grace Oyeyemi Ogundajo
  • Grace Oyeyemi Ogundajo
  • Department of Accounting, School of Management Sciences, Babcock University, Ilishan-Remo, Ogun State, Nigeria.
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Patrick Enyi Enyi
  • Patrick Enyi Enyi
  • Department of Accounting, School of Management Sciences, Babcock University, Ilishan-Remo, Ogun State, Nigeria.
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Ishola Rufus Akintoye
  • Ishola Rufus Akintoye
  • Department of Accounting, School of Management Sciences, Babcock University, Ilishan-Remo, Ogun State, Nigeria.
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Samuel Olajide Dada
  • Samuel Olajide Dada
  • Department of Accounting, School of Management Sciences, Babcock University, Ilishan-Remo, Ogun State, Nigeria.
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  •  Received: 26 September 2018
  •  Accepted: 12 November 2018
  •  Published: 31 January 2019

Abstract

Investors’ curiosity on the worth of their investment could be resolved with the availability of sufficient information in predicting their returns and security. Several studies linked dividend payout to the performance of manufacturing firms in Nigeria but a few considered information as a signal to performance not necessarily to dividend. This paper examined the usefulness of accounting information in predicting the investors return especially dividend payout. Ex-post facto design was adopted using secondary data obtained from annual reports and accounts of 36 selected manufacturing firms for a period of 20 years (1997-2016). The results of the regression (fixed effects) analysis carried out revealed that lagged dividend, leverage and sales growth have significant positive effect on dividend payout while earnings per share, operating cash-flow and firm size influences dividend payout ratio negatively with the exemption of  asset utilization ratio with insignificant effect. It is evident that accounting information is useful to investors’ in predicting the returns on their investment and dividend payout. Investors should look beyond past dividend in forecasting expected returns but several factors as presented in the financial statements in taking informed investment decisions.

 

Key words: Accounting information, lagged dividend, asset utilization, returns prediction, investment.