The Relationship between Dividend Policy and Stock Market Performance: Evidence from the Saudi Stock Exchange (Tadawul)
It is an empirical study that investigates the impact of dividend policy on the performance of stocks in the Saudi Stock Exchange (Tadawul) in the emerging financial market environment. The study focuses on the energy sector firm Saudi Aramco, food sector firm Almarai Company, and industrial sector firm Zamil Industrial from 2020 to 2024. The research assesses the impact of dividend payout ratio, dividend yield and dividend per share (DpS) on the indicators of the work of the stock market, namely the return of stocks and the closing price of stocks. The method used for this quantitative research is a secondary data collection method and the sources of financial data are annual reports and official financial data. SPSS software was used for several statistics, such as descriptive statistics, Pearson correlation analysis, one-way ANOVA and regression analysis to study the relationship between the dividend policy indicators and the stock market performance of the sectors.
Empirical results show that there are significant differences for firms from various sectors in their dividend policy and the valuation of the market. The findings also reveal statistically significant negative correlation between dividend yields, dividend per share (DpS)s and stock market performance variables which indicate that higher dividend payout could be correlated with lower market valuations and lower growth expectations. Further, regression analysis indicates that the dividend yield has the highest impact on the performance of the stock market in the sampled companies.
This study is one of the many that has been written in the literature on dividend policy in emerging financial markets, with this study also giving comparative sectoral evidence from the Saudi financial market during the post-pandemic era and the Saudi Vision 2030 reform. The results have some significance in practical application for the corporate financial managers, investors, and policy makers interested in improving investment decision making, dividend policies, and market efficiency in Tadawul.
Copyright© 2026 The Author(s). This article is distributed under the terms of the license CC-BY 4.0., which permits any further distribution in any medium, provided the original work is properly cited.
Article’s History: Received 29th of May, 2026; Revised 9th of July, 2026; Accepted 25th of August, 2026; Available online: 30th of September, 2026. Published as research article in the Volume XXI, Fall, Issue 4(94), 2026.
Almutlaq, M. A. (2026). The Relationship between Dividend Policy and Stock Market Performance: Evidence from the Saudi Stock Exchange (Tadawul). Journal of Applied Economic Sciences, Volume XXI, Fall, 4(94), 1133 – 1151. https://doi.org/10.57017/jaes.v21.4(94).03
CreDit Authorship Contribution Statement: Almutlaq, A. A.: Conceptualization, Methodology, Data Curation, Formal Analysis, Investigation, Writing – Original Draft, Writing – Review & Editing.
Acknowledgments/Funding: The author received no specific funding for this research and declares no additional acknowledgments.
Conflict of Interest Statement: The author declares that the research was conducted in the absence of any commercial or financial relationships that could be construed as a potential conflict of interest.
Data Availability Statement: The data used in this study were obtained from publicly available annual reports, Tadawul market data, and financial databases, as described in the Data Collection section.
Ethical Approval Statement: This study is based exclusively on secondary financial and stock market data and did not involve human participants, personal data, or animal subjects. Therefore, ethical approval was not required.
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