The Research Of Correlation Between Cash Dividend Ratio And Earning Growth

As an important way to cash dividend of listed companies for profit distribution, realize the profits distribution among the companies and the owners, based on balancing the interests of shareholders, creditors and stakeholders. In the same time, cash dividend policy, is the important part of management strategy for listed companies, has effecting on investment and financial activities and further development of companies. As a result, this paper starts by studying the relationship between growth rates of further net profit and cash dividend payment of listed companies, get results of how the growth of further income be influenced by paying cash dividend through the empirical analysis.This paper is based on knowledge combed by scholars on dividend policy studies, take all listed companies from1995to2012in Shenzhen Ashares as sample, study respectively from four aspects,the whole market, the CSI300index, large cap to small-cap stocks and different industry to find out the relationship between net profit growth rates and dividend payout ratio in the next1-5years of listed companies.Study results showed that from an overall perspective, dividend payout ratio was positively correlated with the net profit for the company’s future growth, which is high dividend high growth; The companies from CSI300index have similar conclusions. By according to market capitalization of listed companies into large to small-cap stocks, we found small cap public company’s net profit growth and dividend payout ratio was positively correlated, while the Middle unit and large cap listed companies are such a significant correlation does not exist. Finally studying by each industry classification of listed companies, empirical results show different dependencies of profit growth and dividend payout ratio because of different industry has its own characteristics.