Determinants Of Dividend Policy In Nigerian Food And Beverage Manufacturing Sector: An Empirical Approach

This study examines the determinants of dividend policy in Nigerian food and beverage manufacturing firms over the period 2014–2024. Specifically, it investigates the effects of profitability (PROF), firm size (FS), leverage (LEV), liquidity (LIQ), and growth opportunities (GO) on dividend policy (DP). The study employs panel data obtained from five listed food and beverage manufacturing firms: Nestlé Nigeria Plc, Dangote Sugar Refinery Plc, Nigerian Breweries Plc, UAC of Nigeria Plc, and Guinness Nigeria Plc. The data were analysed using panel least squares regression. The empirical results reveal that firm size and leverage have statistically significant negative effects on dividend policy. Specifically, firm size (β = −9.17E−05, p = 0.0249) and leverage (β = −1.3784, p = 0.0000) exhibit significant negative relationships with dividend policy. These findings suggest that increases in firm size and financial leverage are associated with lower dividend payouts, all else being equal. Conversely, profitability (β = 0.2901, p = 0.5899), liquidity (β = 0.2484, p = 0.0853), and growth opportunities (β = −0.4477, p = 0.0843) do not have statistically significant effects on dividend policy at the 5% significance level. The findings indicate that firm size and financial leverage are important determinants of dividend policy among the sampled firms, whereas profitability, liquidity, and growth opportunities do not demonstrate statistically significant effects within the study period. The study concludes that Nigerian food and beverage manufacturing firms should adopt prudent financial management strategies that balance debt obligations, investment opportunities, and shareholders' dividend expectations to promote sustainable dividend policies.