Economics, Econometrics and Finance
4 years ago

Newly public firms with dividends outperform those without, study finds.

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Dividend Initiations and Earnings Surprises
Marc L. Lipson, Carlos Maquieira, William L. Megginson

Paper Summary

The study looked at how newly public companies performed after starting to pay dividends compared to those that didn't. Companies that started paying dividends saw better earnings increases and surprises than those that didn't. If non-dividend-paying companies had matched the dividend levels of dividend-paying companies, their earnings would have been significantly higher. This suggests that dividends can show differences in performance between similar companies.

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