Stability of Dividends Payout and Share Returns of Companies Listed at the Nairobi Securities Exchange

Abstract

The consequence of dividends payout on share return is an enticing topic in finance. It is in this spectrum that the study examines the possible effects of stability of dividends payout on the share return for organizations quoted at the Nairobi Securities Exchange. The projected relation is that a stability of dividend payout policy shall improve share returns and vice versa. The study uses a descriptive research design from a population survey of the 67 quoted organizations at the NSE in the four years between 2013 and 2016. The study used secondary data available for 20 share index firms at the NSE and on the financial reports available on their websites. The regression model used in the study has the share return as a function of dividends payout ratio. The study found a strong positive link between dividend payout ratio and the share return. The study concludes that there’s a positive relationship between share return and dividends payout ratio for firms listed at the NSE but the relationship is insignificant.