Dividend policy on publicly water industry companies listed on B3

Alexandre Rodrigues da Silva, Guilherme Kirch

Abstract


Companies in the water and sanitation sector try to balance the social responsibility of an essential asset and the remuneration of investors within a heterogeneous market for financial assets. The objective of this study is to evaluate the dividend policy of publicly traded companies in the water and sanitation sector in relation to the price of their market value. The period of study ranged from the IPO of the shares until December 31, 2019. The following variables were collected from each company: price, payment of dividends (aggregated in annual payment), annual net income and payout, this one defined as the ratio between the dividend payment and net income. The following conclusions were reached: 1) no differences were found between dividend paying and non-paying companies regarding the value of their shares; 2) there were also no differences between high and low payout paying companies regarding the value of their shares.

Keywords


dividend policy, corporate finance, water industry

Full Text:

PDF

References


ALLEN, J.; PRYKE, M. Financialising household water: Thames Water, MEIF, and ‘ring-fenced’ politics. Cambridge Journal of Regions, Economy and Society, v. 6, 419–439, 2013.

ARAÚJO, F. C.; BERTUSSI, G. L. Saneamento básico no Brasil: estrutura tarifária e regulação. Planejamento e políticas públicas. v. 51, p. 165-202, 2018.

ARMITAGE, S. Demand for dividends: the case of UK water companies, Journal of Business Finance and Accounting, v. 39, p. 464–499, 2012.

BAKER, M.; WURGLER, J. A Catering Theory of Dividends, The Journal of Finance, v. LIX, n. 3, p. 1125-1165, 2004.

BEATTIE, V.; GOODACRE, A.; THOMSON, S.J. Corporate financing decisions: UK survey evidence. Journal of Business Finance and Accounting. v. 33, p. 1402-34, 2006.

BERTOMÉU-SÁNCHEZ, S. On the effects of the financialization of private utilities: lessons from the UK water sector. ECARES working paper 2019-29, 2019. Avaiable at: https://EconPapers.repec.org/RePEc:eca:wpaper:2013/297676 last accessed on 17 October 2020.

BERTOMÉU-SÁNCHEZ, S.; ESTACHE, A. Should Infrastructure Regulators regulate Dividends? Hints from a Literature Survey ECARES working paper 2019-18, 2019.

BLOUIN, J., CORE, J.E.; GUAY, W. Have the tax benefits of debt been overestimated?, Journal of Financial Economics. v. 98, p. 195-213, 2010.

FREITAS, F. G.; MAGNABOSCO, A. L. Benefícios econômicos da expansão do saneamento. Relatório de pesquisa produzido para o Instituto Trata Brasil e o Conselho Empresarial Brasileiro para o Desenvolvimento Sustentável. São Paulo: Ex Ante Consultoria Econômica, 2014.

GRAHAM, J.R. How big are the tax benefits of debt, Journal of Finance. v. 55, p. 1901- 41, 2000.

GRAHAM, J.R. and C.R. HARVEY. The theory and practice of corporate finance: evidence from the field. Journal of Financial Economics. v. 60, p. 187-243, 2001.

KAY, J. A.; THOMPSON, D. J. Privatisation: a policy in search of a rationale. The Economic Journal, v. 96, p. 18–32, 1986.

LEONETI, A. B.; PRADO, E. L.; OLIVEIRA, S. V. W. B. Saneamento básico no Brasil: considerações sobre investimentos e sustentabilidade para o século XXI. Revista de Administração Pública, v.45, n.2, p.331-348, 2011.

LEI Nº 14.026, DE 15 DE JULHO DE 2020. Avaiable at: http://www.planalto.gov.br/ccivil_03/_ato2019-2022/2020/lei/L14026.htm. last accessed on 17 October 2020.

MAGNUSSON, T.; ENEBRAND, A. Dividend policy and its impact on firm valuation: A study of the relationship between dividend policy and stock prices on the Swedish market. Jönköping University, Sweden. ISRN: JU-IHH-FÖA-2-20180624, 2018.

NUNES, V. R. S. O setor de saneamento básico no Brasil: desafios e perspectivas. 2015. Monografia (Engenharia de Produção) – Universidade Federal do Rio de Janeiro, Rio de Janeiro, 2015.

PARTINGTON, R. Water company bosses’ bonuses have damaged trust, says watchdog. The Guardian, 2018. Avaiable at: https://www.theguardian.com/business/2018/jul/03/watercompany-bosses-bonuses-ofwat-payouts. last accessed on 11 October 2020.

RAZA, H.; RAMAKRISHNAN, S.; GILLANI, S. M. A H.; AHMAD, H. The Effect of Dividend Policy on Share Price: A Conceptual Review International Journal of Engineering & Technology, v. 7, p. 34-39, 2018.

SCRIPTORE, J. S.; TONETO JÚNIOR, R. A estrutura de provisão dos serviços de saneamento básico no Brasil: uma análise comparativa do desempenho dos provedores públicos e privados. Revista de Administração Pública, v. 46, n. 6, p. 1479-1504, 2012.

SILVA, A. Concessionárias do setor elétrico brasileiro e sua política de dividendos: influência de variações do PIB. Revista Unemat de Contabilidade, v. 8, n. 16, p. 20-31, 2019.

SOUSA, A. C. A., COSTA, N. R. Incerteza e dissenso: os limites institucionais da política de saneamento brasileira. Revista de Administração Pública, v. 47, n. 3, p. 587-599, 2013.

YEARWOOD, K. The privatized water industry in the UK. An ATM for investors. The Public Services International Research Unit. 35p., 2018.


Refbacks

  • There are currently no refbacks.