"The Impact of Earnings per share (EPS) and Dividends on stock returns in the Long-term for the Industrial firms Listed at Amman Stock Exchange for the Period 2000-2009"

Egyptian Journal Of Business Administration , Vol. 4 , 2013.

Abstract

This research aims to study the impact of earnings per share and dividends distributions to market return in a representative sample of the industrial sector companies listed on the Amman Stock Exchange (ASE). The study assumes no impact statistically significant between the independent variables following earnings per share, dividends distribution and the time period, the dependent variable represented by stock return. The study sample included thirty-three industrial companies listed at Amman Stock Exchange during the period (2000-2009). The study period was divided into three periods ranging between three and ten years in order to study the effect of time on the market earnings per share. Correlation analysis and simple regression were used to test the hypotheses of the study. The researcher found a set of conclusions:

1. The lack of a statistically significant impact of earnings per share on stock returns.

2. The lack of a statistically significant impact of dividends on stock returns.

3. The lack of a statistically significant impact of the time period on stock returns.

Based on the results of the statistical analysis, there is a noticed improvement in the values of the correlation coefficient and explanatory power (R ²), once the time period is prolonged. This means that there an effect of independent variables (earnings per share, dividends, and the time period) on the dependent variable (stock return). However, this  effect was not statistically significant, which means that the impact on the dependent variable is limited, taking into account some of the  economic events in the second study period (2000-2005) and the third (2000-2009) .