Diagnostic Correlative Evaluation Of Ownership Structure And Earnings Yield

Abstract

The study was set to investigate the diagnostic correlative link between ownership structure and earnings performance of quoted Consumer Goods Companies in Nigeria. The study correlatively diagnose causal link of the two constructs' relationship – the Institutional and Managerial Ownership Structures – with earnings yield. A quantitative technique was adopted for the study using the panel data obtained from the studied companies listed on the Stock Exchange from 2010 to 2019. A total of 21 consumer goods companies were studied for 10 years (2010 to 2019), giving a total of 210 observations. Structural Equation Model (SEM) was used to estimate the structural relationship between ownership structures constructs on earnings yield. The analysis was aided by AMOS software version 23. The results showed that institutional ownership structure has a significant positive effect on earnings yield of quoted consumer goods companies studied. Also, the study found out that managerial ownership structure has a significant positive effect on earnings yield of quoted consumer goods companies. Therefore, the paper recommended that management of consumer goods companies should ensure adequate reform of ownership structures and put in place an effective internal control mechanism that will enhance the performance of the firm and improve earnings yield. Equally, an adequate institutional ownership structure should be encouraged to improve the companies’ earnings yield.