Dividend changes and future profitability firms listed on Bursa Malaysia / Sara Azmeelia Aminudin

This paper sought to examines whether there is relationship between dividend changes and future profitability. This major source of data were collected using secondary database records of publicly companies obtained from the Bursa Malaysia Stock Exchange. The study focused on listed firms at Bursa Malaysia and used 20 firm over the period 2012-2016 that are listed from different sectors in Bursa Malaysia Stock Exchange. The research questions used in the study were; (i) what is the significant relationship between earnings per share and return on asset, (i) what is the significant relationship between earnings per share and return on equity, (ii) what is the relationship between earnings per share and dividend payout ratio. The research method used in the study was Ordinary Least Square (OLS) technique to perform regression analysis between the dependent and independent variable as the study aimed at finding relationship exists between dividends and firms performance. Research of the relationship between dividend changes and future profitability advantage stock market investors in Malaysia demonstrating whether dividend changes could be used as an indicative component for future profitability of firms. Therefore, firm could use this as a contraption for proficient investment decisions. The results of the relationship between dividends and firm performance showed that there exists a relationship between dividends and future profitability. There is a positive relationship between earnings per share and return on equity. Meanwhile, negative relationship between earnings per share and independent variable, dividend payout ratio and return on asset as shown by the negative coefficients. The results also demonstrate that the extend of the significant relationship between return on asset and return on equity and firm future profitability. While, insignificant relationship between dividend payout ratio and future profitability. Other than that, results indicate that current dividend changes are greatly related to current earnings changes. The study came to resolution that there is a relationship between dividend and future profitability
for firms listed on Bursa Malaysia.