Earnings Per Share, Returns on Investment and Stock Returns of Quoted Manufacturing Companied in Nigeria

Abstract

The study was undertaken to examine the relationship subsisting among Earnings per share (EPS), Return on Investment (ROI) and Stock returns of listed manufacturing Companies in Nigeria. This was motivated by the fact that, in the literature there seem a consensus that these indicators drive investment decisions in diverse sectors. Ex-post facto research design was employed using secondary data gathered from the annualized reports of the selected manufacturing listed on the floor of the Nigeria Exchange Group. Nine companies with the most active indices were selected for the period 2015 to 2025. The variables of study were Earnings per share (EPS), Returns on Investment (ROI) and Stock Returns (SR). Data collectedwere analyzed using simple regression analysis (Ordinary Least Squares, OLS) involving descriptive and inferential statistics. Results shows that the explanatory variables has positive influence, but weak relationships with the dependent variable. Also, results shows insignificant statistical influence given that P-values were greater than pre-determined level of significance of 5% (0.05). It was concluded from the results that EPS and ROI are not the only drivers of stock returns, but other factors existing in the business environment of Nigeria. It was recommended that both individual and institutional investors should not only look at this variable, but other macro-economic indicators when deciding to investment in the sector.