Determinants of dividend payout in utiities sector / Mohammad Rasul Mohammad Johari

This study attempts to determine the factors affecting determinants of dividend payout in the utilities sector. The factors examined in this study are debt, cash flows, investment and growth. The assumptions that were applied in this research are if a company prefers to make a dividend payout, what are the determinants of it and do the variables have an impact on the dividend payout? Data was obtained from the relevant databases and annual reports of the sampled companies. The study examines a total of 12 listed companies. The data were collected quarterly starting from year 2017 until 2019. In analyzing the data, the study used fixed and random effects and an ordinary least squares model. The findings underline the significant role of the independent variables in deciding the amount of dividend payout in the utilities sector. The more the dividend payment, the better the company's profitability (Bhattacharya 1979). This result was also supported (Ho 2003). As stated by Farman Ali Khan (2017) the decision to pay out dividends is usually based on whether to distribute all of the company's income or keep a portion of it. The results demonstrate that cash flow, and growth have a significant and positive relationship with dividend payout, while, investment has a significant but negative relationship with dividend payment and debt has an insignificant but positive link with dividend payout. The results of this study will help a company's board of directors and management team decide on a dividend strategy that is suitable for the company. The findings can also help shareholders make investment decisions.