Impact of Earning Per Share, Dividend Payout Ratio, and Price Earning Ratio on Stock Prices in the Manufacturing Sector

Wisno Widodo Banjar; M. Hasbi Saleh

doi:10.36407/jpafm.v3i1.1579

Wisno Widodo Banjar Sekolah Tinggi Ilmu Ekonomi Indonesia Jakarta, Jakarta, Indonesia
M. Hasbi Saleh Sekolah Tinggi Ilmu Ekonomi Indonesia Jakarta, Jakarta, Indonesia

DOI: https://doi.org/10.36407/jpafm.v3i1.1579

Keywords: Earning Per Share, Dividend Payout Ratio, Price Earning Ratio, and Stock Price

Abstract

Purpose: The research aims to determine the effect of Earning Per Share (EPS), Dividend Payout Ratio (DPR), and Price Earning Ratio (PER) on stock prices in manufacturing companies within the consumer goods industry sector listed on the Indonesia Stock Exchange (IDX).

Methods: his study employs an associative strategy, focusing on manufacturing companies listed on the IDX from 2015 to 2019. A sample of 17 companies was selected through purposive sampling, leading to 85 observations. The analysis utilized secondary data and panel data regression using Eviews version 11 software.

Findings: The study reveals that earnings per Share (EPS) significantly impact stock prices. In contrast, the Dividend Payout Ratio (DPR) does not significantly affect stock prices. Furthermore, the Price Earning Ratio (PER) also significantly influences stock prices, underscoring the importance of EPS and PER in assessing market valuations.

Practical Implications: The study offers essential insights for investors and companies in the stock market. Investors should track EPS and PER due to their significant impact on stock prices and remain cautious of high DPR, indicating limited growth. Companies are urged to enhance EPS and PER to attract investors and boost stock prices. Effective financial management focused on growth can improve investor perceptions and enhance market performance.