Dividend Policy and Solvency Effects on Stock Returns of Manufacturing Companies

Abstract

This study aimed to analyze dividend policy's effect in the proxy with Dividend Payout Ratio (DPR) and solvency in the proxy with Debt to Equity Ratio (DER) on Stock Returns of manufacturing companies listed on the Indonesia Stock Exchange from 2014 to 2018. Ratio analysis is one of the analyses used by investors to analyze a company's stock performance. This study used a quantitative method. The sampling technique used a purposive sampling method, and the sample was selected following predefined criteria. To obtain samples of 10 manufacturing companies, they were selected from a population of 144 manufacturing companies incorporated in the Indonesia Stock Exchange from 2014 to 2018. The data used in this study was financial statement data, and sources used to obtain these data were the Indonesian Capital Market Directory (ICMD) accessed from www.idx.co.id. The data analysis model used was panel data regression. This study showed that the Dividend Payout Ratio and Debt to Equity Ratio had a significant effect on stock returns.