The Role of Profitability in the Relationship between Dividend Payout and Market Value of Shares of Non-Financial Companies Listed on the Palestine Exchange

This study aimed to examine the relationship between dividend payout and the market value of shares of non-financial companies listed on the Palestine Exchange, as well as to investigate the role of profitability as a potential moderating variable in this relationship. The study adopted a descriptive-analytical approach, analyzing data from 28 non-financial companies listed on the Palestine Exchange during the period (2014-2022), comprising 252 observations. To test the study hypotheses, panel data techniques and outputs from the STATA statistical software were employed. The study utilized multiple regression analysis using the ordinary least squares (OLS) method. The findings revealed a positive moderating role of the profitability ratio (ROE) on the relationship between dividend payout and the market value of shares.Moreover, the study demonstrated a strong positive relationship between dividend payout and return on equity (ROE) on one hand, and the market value of shares on the other. The study presented several recommendations, the most significant being the necessity of aligning dividend payout policies with investor requirements, with emphasis on profitability and improving financial performance to enhance market value. Additionally, sustainable dividend payout strategies should be established to balance reinvestment and dividend payout, alongside improving capital structure. Furthermore, financial risk analysis and strategic planning should be conducted to mitigate potential shocks, adopting a combination of cash dividends and reinvestment to achieve sustainable growth while implementing balanced financing policies.