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Analysis of Dividend Policy of the Romanian Financial Investment Companies

Author

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  • Nicoleta BARBUTA-MISU

    (Dunarea de Jos University of Galati, Romania)

Abstract

The purpose of dividend policy, promoted by a joint-stock company may be: building trust and forming a true business ownership, business growth, increase creditworthiness of the company and of trust others to it. The paper aim is to study the dividend policy to those five Romanian Financial Investment Companies in the period 2006-2012, through a series of specific indicators such as: dividend per share, dividend growth rate, dividend distribution rate, dividend yield, earnings per share, price earnings ratio, in order to reflect the performance and the impact of financial crisis on their performance on the financial market. Tracking the dynamics of these indicators allows us to draw conclusions on the position of the companies on the securities market, and their level influences the decision of shareholders to maintain or withdraw of shares, to invest in other more profitable businesses. Dividend yields made every year by Financial Investment Companies justify the high interest from investors for these shares. Currently, these companies offer a very attractive return for investors compared to the average dividend yield of the Stock Exchange. The evolution of the price earnings ratio shows the normal trend of rise of the companies’ shares in the period 2007-2008, after that they have entered the market at highly undervalued levels especially after declining in 2008.

Suggested Citation

  • Nicoleta BARBUTA-MISU, 2013. "Analysis of Dividend Policy of the Romanian Financial Investment Companies," Economics and Applied Informatics, "Dunarea de Jos" University of Galati, Faculty of Economics and Business Administration, issue 3, pages 23-32.
    • Handle: RePEc:ddj:fseeai:y:2013:i:3:p:23-32
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    References listed on IDEAS

    as
    1. du Jardin, Philippe & Séverin, Eric, 2011. "Dividend policy," MPRA Paper 44382, University Library of Munich, Germany.
    2. Tatiana Dănescu & Ovidiu Spătăcean, 2009. "Analytical Procedures Used In Financial Audit For The Valuation Of Portfolio Performances - Case Of Financial Investment Companies," Annales Universitatis Apulensis Series Oeconomica, Faculty of Sciences, "1 Decembrie 1918" University, Alba Iulia, vol. 1(11), pages 1-2.
    3. Husam‐Aldin Nizar Al‐Malkawi, 2007. "Determinants of Corporate Dividend Policy in Jordan: An Application of the Tobit Model," Journal of Economic and Administrative Sciences, Emerald Group Publishing Limited, vol. 23(2), pages 44-70, December.
    4. Buti,Marco & Deroose,Servaas & Gaspar,Vitor & Martins,João Nogueira (ed.), 2010. "The Euro," Cambridge Books, Cambridge University Press, number 9789279098420, September.
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    More about this item

    Keywords

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    JEL classification:

    • G30 - Financial Economics - - Corporate Finance and Governance - - - General
    • G32 - Financial Economics - - Corporate Finance and Governance - - - Financing Policy; Financial Risk and Risk Management; Capital and Ownership Structure; Value of Firms; Goodwill
    • G35 - Financial Economics - - Corporate Finance and Governance - - - Payout Policy

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