Investors perception and profitability of listed companies: Evidence from Nigeria

Abstract

The stock market has continually been a source of economic development in most developing countries. This study examined the relationship between investors' perception and profitability of quoted companies in Nigeria using secondary data obtained from the annual reports of forty (40) companies. The study employed the multiple regression techniques to analyze the relationship between investors' perception (measured by dividend per share and earning per share) and profitability (measured by the return on equity). The results show that investors' perception, when proxy by earnings per share, have a positive and significant impact on profitability. However, the study noted that investors' perception, when measured by dividend per share, tend to have a positive effect on profitability, but it is statistically insignificant. By implication, investors and other stakeholders that are interested in investing in stocks can predict the earning capacity of listed firms in the stock market.

Banking Industry Specific Determinants of Financial Distress: Empirical Evidence from ASEAN Countries

“…All the measures related to profitability simply shows the net margin. It is the necessary criteria to gauge a new venture (Abisola & Femi, 2019). The profitability ratio more than or equal to 1 is considered acceptable, and less than one is considered low or project failure.…”

Influence of Profitability, Sustainability Finance Disclosures, and Sustainability Report Assurance on Cost of Debt

“…According to Yuliarti et al (2021) profitability is a scale used to calculate the ability of a company with regard to its own sales, overall assets, and the assessment of profitability in a company varies and is related to profits and assets or capital that will be matched with one another (Hasibuan et al, 2018). The profitability of the company greatly influences the profits generated, so that in the viewpoint of investors, a company's management is better when there is a higher profit investors and creditors (Akinola & Akinsulere, 2019). According to (Hamzah, 2021) research, it shows that the cost of debt is not noticeably influenced by profitability.…”

Tax Planning and Working Capital Management Decision of Listed Manufacturing Companies in Nigeria

“…On the other hand, several management abuses such as higher operating expenses, poor execution, tax inefficiency and higher brokerage commission as it relates to poor investment decisions, are clogs in the wheel of performance in listed manufacturing companies (Hakim, 2020). The consequence of which include reduction in earning capacity and poor financial ability of these companies as identified by (Akinola & Akinsulere, 2019).…”

“…On the other hand, several management abuses such as higher operating expenses, poor execution, tax inefficiency and higher brokerage commission as it relates to poor investment decisions, are clogs in the wheel of performance in listed manufacturing companies (Hakim, 2020). The consequence of which include reduction in earning capacity and poor financial ability of these companies as identified by (Akinola & Akinsulere, 2019).Investment is an efficient allocation of human, material and financial resources for medium-term or long-term benefit with the aim of recouping the cost incurred at a profit. Sabri (2016) says that investment decision is committing capital on items that yield optimum returns in a given period of time.…”