Characteristics of Industrial Companies Stratified by Dividend Level and Risk

Abstract

This abstract was created post-production by the JFI Editorial Board.

The purpose of this study is to identify characteristics of large, industrial, dividend-paying firms in the United States. Several interesting conclusions and future research implications can be drawn from the estimated models based on annual data from 1995 to 2004: (1) as expected, dividend per share changes are positively related to changes in market/book value ratio for the two low dividend level groups; (2) as expected, dividend per share changes are positively related to company size changes for all but the low risk, low dividend group; (3) dividend per share changes are negatively related to debt ratio changes over time only for the high risk, high dividend level group; (4) dividend per share changes are negatively related to changes in common shares outstanding for the two high dividend groups, regardless of risk; and (5) dividend per share changes are positively related to net profit changes only for the high risk, high dividend level group. A five-year moving time span is applied to each group as a means to provide additional insight into parameter changes; however, very few consistent relationships are observed over time. This may be due to the limited sample sizes in each group.