The Impact of Dividend Payout Ratio on a Company's Profitability: A Comparative Study between Financial and Non-Financial Institutions in Egypt

Abstract

This study explored if there is a noticeable difference between the effect of the dividend payout ratio on the profitability of the financial institutions and non-financial institutions through regression analysis. This Descriptive analytical study was conducted on 14 institutions; 7 financial banks and 7 non-financial institutions in the Real Estate sector from the Egyptian Stock Exchange in 7 years respectively, during the period of 2015 till 2019. Data was collected from annual and financial reports of the corporations. Collected data sets were analyzed by SPSS-16 software. The results showed that there is an insignificant impact for average DPR on performance of non-financial institutions but there is a significant impact for average DPR on ROA, ROE (Performance) therefore there is a negative significant relation between the average dividend payout ratio of non-financial institutions and the return on assets of the non-financial institutions. Our research findings indicate that, there is a difference between the impact of the DPR on the performance of financial and non-financial institutions. Therefore, we will accept the hypothesis.