The Continuous Impact of Profitability Indicators on Stock Market Prices of Listed Industrial Companies in Jordan

Authors

Tawfiq Abdel Jalil, The University of Jordan - JordanFollow

Abstract

This study examined how the Amman Stock Exchange evaluates the effect of earnings yield and dividends yield on stock market prices and determines the duration of this evaluation. The study period extends over five years, from 2012 to 2016, and the study sample consists of 41 publicly held industrial firms listed on the Amman Stock Exchange. The data analysis shows a significant effect of earnings yield on stock market price at the 1% level in the earnings realization year, while dividends yield does not affect stock market price at the 5% significance level for the same year. This model indicates that changes in the independent variables account for 5% of the change in the dependent variable. Furthermore, the significant effect of earnings yield and dividends yield on stock market price at the 1% level occurs in the first year following the earnings realization year. This model shows that changes in the independent variables account for 22% of the change in the dependent variable. Additionally, the significant effect of dividends yield on stock market price at the 1% level occurs in the second and third years following the earnings realization year, with coefficients of determination of 20% and 19.8%, respectively. In the fourth year following the earnings realization year, dividends yield does not affect stock market price at the 5% significance level, and earnings yield does not affect stock market price after the first year post-earnings realization at the 5% significance level.

Recommended Citation

Abdel Jalil, Tawfiq (2022) "The Continuous Impact of Profitability Indicators on Stock Market Prices of Listed Industrial Companies in Jordan," Jordan Journal of Applied Science-Humanities Series: Vol. 31: Iss. 1, Article 8.
Available at: https://digitalcommons.aaru.edu.jo/jjoas-h/vol31/iss1/8