Investor’s behavior towards dividend paying out firms

  • 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 well.


Practical 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.


Keywords: Investors’ behavior, dividend, payout, stock market, Pakistan Stock Exchange

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Published
2018-07-08
How to Cite
KEMAL, Muhammad Usman; KASHIF, Sadaf. Investor’s behavior towards dividend paying out firms. PRIZREN SOCIAL SCIENCE JOURNAL, [S.l.], v. 2, n. 2, p. 12-26, july 2018. ISSN 2616-387X. Available at: <http://prizrenjournal.com/index.php/PSSJ/article/view/30>. Date accessed: 20 sep. 2018. doi: https://doi.org/10.1985/2.