Factors Affecting the dividend payout: Evidence from Saudi Arabia

Abstract

Businesses need financing and investors need higher returns. Both are indispensable for each other. Keeping in view the above fact, the current study examined the dividend payout factors affecting the Saudi cement industry. Secondary data are used to investigate the mentioned purpose over the period from 2006 to 2020. It was noticed that cement industry has become crucial for all other industries in general and particularly to the construction industry of Saudi Arabia. The study has employed the regression examination to explore the association regarding endogenous and exogenous variables. The present study has used the dividend payout ratio as an endogenous variable, while exogenous variables are liquidity (CR), profitability (ROA), FS (Firm Size), and financial leverage. The study reported that ROA has statistical significant and positive association with depended variable i.e. (dividend disbursement ratio). ROA is an important predictor of dividend payout, while FS, LEV, and CR have reported insignificant association with the dividend payout ratio. Cement industry of Saudi Arabia and investors would benefit from the current findings.