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Risper Kemunto Mogire - Jomo Kenyatta University of Agriculture and Technology (JKUAT), Kenya

Prof. Willy Mwangi Muturi - Jomo Kenyatta University of Agriculture and Technology (JKUAT), Kenya


Firm characteristics are known by ensuring security of financial assets and liquidity dealings. All firms are mostly propelled by profit generation in their day-to-day operations. The amount generated can be used for debt servicing, acquire new tangible and non-tangible assets, finance working capital needs or be distributed to ordinary shareholders. There are competing issues amongst management as they strive to share the proceeds to the ordinary shareholders. Hence, the link of firm financial characteristics and dividend payout was explored. Specifically, the influence of leverage, liquidity, profitability and firm size on dividend payout was evaluated. The study was based on Modigliani and Miller hypothesis, agency theory. The data was retrieved from annual financial statements from 2011 to 2020. Univariate and multivariate statistics were applied for data analysis. Thus, listed insurance companies are undertaking investments in businesses that are maximizing shareholders wealth. Listed insurance companies are known by positive growth in firm size signals maximization of shareholders wealth. The study recommended that with positive significant effect of liquidity on dividend payout of listed insurance companies, there is need for examination of working capital management by respective listed firms to optimize value contribution. With positive significant effect of profitability on dividend payout indicated that, listed insurance companies are undertaking business opportunities which are yielding positive returns for all stakeholders. Hence, there is need for listed insurance firms to deploy investment strategies that not only maximizes shareholders wealth but also enhances odds of organization sustainability. Thus, there is need for listed insurance companies to pursue investment opportunities.

Full Length Research (PDF Format)