Earnings Predictability and Stock Price: an Investigation of Food and Beverage Manufacturing Companies in Nigeria
Year: 2025
Type: article
Abstract: The study examined earnings predictability and the stock price of foods and beverage manufacturing companies in Nigeria. Using simple random sampling technique, eight (8) companies listed on the Nigerian Exchange Group (NGX) were studied. Ex-Postfacto research design was adopted and data were obtained from annual reports and accounts of the selected companies for the period (2014-2023). Dividend per Share (DPS) and Return on Asset (ROA) were used as the independent variables, while Stock price (SP) was the dependent variable. Two objectives and two hypotheses guided the study. Data were analyzed using descriptive statistics, and multiple regression techniques. The results revealed that both dividend per share and return on assets have significant effect on stock price of foods and beverage manufacturing companies in Nigeria, (r = 0.565856; P-value = 0.0000 < 0.05) and (r = 0.766455; P-value = 0.0001 < 0.05), respectively. The implication of the findings include that dividend per share can convey information about a company's future prospects, such as its ability to create wealth for investors, while increase in return on assets can signal to investors that the company expects strong future earnings. The study recommended that management should review dividend payout policy to remove uncertainty, and maintain consistent dividend payout ratio. Management should optimize asset utilization and management in order to maximize return on asset. These steps will keep stock price on the upward trend
Authors: Nwachukwu Basilia, Chiamaka, Ugwu Timothy, Chidubem, Agbo, Emmaculeta, Obianujunwa
Language: English
Subfield: Accounting
Domain: Social Sciences
Open Access status: green
OpenAlex ID: W6893338932
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