Title: Dividend Policy and Investment Return of Listed Deposit Money Banks in Nigeria
Authors: Chuka Peter Adibeli, Dr. Gilbert O. Nworie
Volume: 10
Issue: 7
Pages: 136-146
Publication Date: 2026/07/28
Abstract:
The study examined the effect of dividend policy on investment return of listed deposit money banks in Nigeria. The specific objective of the study was to examine the effect of dividend pay-out ratio, and dividend yield on return on investment of listed deposit money banks in Nigeria. Ex-post facto research design was used in the study. The population of this research study consists of twelve (12) deposit money banks in Nigeria as at 31st December, 2023. Criterion based purposive sampling technique was adapted to select nine (9) banks. Secondary data for this study were collected through the use of financial statements from the sampled banks for a ten year period that covered 2014 to 2023. The hypotheses were tested using the Ordinary Least Squares (OLS) regression. The findings showed that: dividend pay-out ratio has a significant negative effect on return on investment of listed deposit money banks in Nigeria (? = -0.6930, p = 0.0019); dividend yield has a significant positive effect on return on investment of listed deposit money banks in Nigeria (? = 4.7684, p = 0.0000). In conclusion, while the dividend pay-out ratio may signal a more conservative approach to profit distribution, potentially signaling a lack of growth opportunities, the dividend yield serves as a clear indication of the bank's current financial strength and profitability. The study recommends that bank management of listed deposit money banks in Nigeria should consider adopting a more balanced dividend pay-out strategy by retaining a larger portion of earnings to reinvest in growth and expansion projects, which would likely improve long-term profitability and, in turn, increase investor returns.