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Investor’s behavior towards dividend paying out firms

Author

Listed:
  • Muhammad Usman Kemal

    (Iqra University Islamabad Campus)

  • Sadaf Kashif

    (Iqra University Islamabad Campus)

Abstract

Purpose: The purpose of doing this research is to examine to see the behavior of investors towards the dividend payouts. It also helps the firms to target their investors according to their demographics and investors behavior as well.Methodology: Purposive sampling technique is used to collect the data of 75 investors. Out of the total of 75 responses, 66 responses are used for the analysis purpose because 9 are categorized themselves as non-investors in the stock market. Among all the investors of stock market, 82 percent of the respondents are male while 18 percent are females. Cross tabulation technique is used to see the behavior of investors towards the dividend payouts.Findings: The results of the research supporting the fact that investors love to receive a dividend regular or irregular basis and whether it is in the form of cash or a share. The behavior of investors toward the firm who provide dividends are strong and they also trust those firms who are acting so as well. Investors also believe that the firms providing high dividend are less risky firms and another reason they are providing high dividends is due to their higher growth and they wanted to share the profit with their shareholders as wellPractical implications/Originality/Value: The research is very much practical in nature and it will help the investors towards the dividend payout of their stocks. Moreover, this research is giving us a path to analyze which age group is interested in investing in a stock and their reasons of investing in a stock as well.Limitations: The data in our research is too less and we cannot generalize to other countries but it gives a direction about the behavior of an investor while investing in a stock market.

Suggested Citation

  • Muhammad Usman Kemal & Sadaf Kashif, 2018. "Investor’s behavior towards dividend paying out firms," Prizren Social Science Journal, SHIKS, vol. 2(2), pages 12-26, December.
    • Handle: RePEc:prj:publsh:v2:y:2018:i:2:p:12-26
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    References listed on IDEAS

    as
    1. Akhtar, Muhammad Naeem & Hunjra, Ahmed Imran & Andleeb, Arifa & Butt, Babar Zaheer, 2011. "Individual investors perception of dividends: Pakistan’s percpective," MPRA Paper 40682, University Library of Munich, Germany.
    2. Dong, Ming & Robinson, Chris & Veld, Chris, 2005. "Why individual investors want dividends," Journal of Corporate Finance, Elsevier, vol. 12(1), pages 121-158, December.
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    4. Joshua Abor & Godfred A. Bokpin, 2010. "Investment opportunities, corporate finance, and dividend payout policy," Studies in Economics and Finance, Emerald Group Publishing Limited, vol. 27(3), pages 180-194, August.
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    8. Tehmina Khan, 2006. "Company Dividends and Ownership Structure: Evidence from UK Panel Data," Economic Journal, Royal Economic Society, vol. 116(510), pages 172-189, March.
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