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Analysis of Earning Per Share on Stock Prices with Dividend Yield As an Intervening Variable in LQ45 Companies in Indonesia Stock Exchange

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Analysis of Earning Per Share on Stock Prices with Dividend Yield As an Intervening Variable in LQ45 Companies in Indonesia Stock Exchange International Journal of Research and Review Vol.8; Issue: 1; January 2021 Website: www.ijrrjournal.com Research Paper E-ISSN: 2349-9788; P-ISSN: 2454-2237 Analysis of Earning Per Share on Stock Prices with Dividend Yield as an Intervening Variable in LQ45 Companies in Indonesia Stock Exchange Muhammad Fauzan Mirzaldi1, Isfenti Sadalia2, Nisrul Irawati2 1,2Master of Management Study Program, Postgraduate School of University of Sumatera Utara Corresponding Author: Muhammad Fauzan Mirzaldi ABSTRACT between Dividend Yield and Stock Price. Dividend Yield capable of influencing Earning This study is conducted in The LQ45 Company Per Share up to 0.9%, whereupon Dividend on Indonesia Stock Exchange 2015 - 2019. This Yield and Earning Per Share are able to affect study aims to analyze The Effect of Dividend Stock Price up to 47.4%. Yield on Stock Price with Earning per Share as Intervening Variable in The LQ45 Company on Keywords: Dividend Yield, Earning Per Share, Indonesia Stock Exchange 2015-2019. The type Stock Price of this study is comparative causal that analyze the causal relationship between two variables or BACKGROUND more. The number of sample in this study is 22 LQ45 companies are 45 issuers that companies. In accordance with the defined have gone through a selection process with hypothesis in this study, statistical data analysis high liquidity as well as several other is measured using SmartPLS (Partial Least selection criteria. These criteria can include Square) software. Based on the result of the tests, the significance direct effect test result consideration of market capitalization shows that independent variable (Dividend selected by the Indonesia Stock Exchange. Yield) has negative and significant effect on The companies listed in LQ45 are 45 dependent variable (Stock Price), however companies with the best stocks that are the Dividend Yield has positive influence on target of investors. So in making the stocks intervening variable (Earning Per Share) but not contained in the LQ45 index as part of the significantly and intervening variable (Earning population and sample, research can Per Share) positively and significantly affect the describe the state of the LQ45 stock price dependent variable (Stock Price) and movements from 2015 - 2019. intervening variable (Earning Per Share) is not significant as the mediator of the correlation Figure 1. International Journal of Research and Review (ijrrjournal.com) 235 Vol.8; Issue: 1; January 2021 Muhammad Fauzan Mirzaldi et.al. Analysis of the effect of dividend yield on stock price with earning per share as intervening variable in the LQ45 company on Indonesia stock exchange 2015 – 2019. LQ45 Stock Price Movement expects a stock dividend. If investors intend From Figure 1, it is known that on to sell at a later date, these investors will April 6, 2015, the LQ45 companies expect share dividends and profits due to an experienced an increase in share prices by increase in share prices. This means that if 955.69, then September 28, 2015 the dividend yield of an efficient company experienced a decrease of 699.01 and is higher, the more likely it is that the share experienced an increase again on January price will be valued high. This will make 22, 2018 amounting to 1,120.49. investors willing to invest in the company, Furthermore, it decreased on July 2, 2018, so that the demand for these shares will amounting to 898.74. After that on February increase which in turn will cause the stock 4, 2019, the share price increased to price to rise as well. Based on the 1,030.15 and decreased on May 20, 2019 by descriptions above, this study aims to 931.48, then increased again to 1,027.27 on determine the stock price, how much July 15, 2019, then decreased again on influence the earnings per share have on October 7, 2019 amounting to 937.05 and stock prices in increasing the dividend yield closed at the end of the year, namely in LQ45 companies. December 30, 2019 at 1,014.47. The development of the LQ45 share price has Stock price attracted investors to invest. Before In this study, the share price in investing, investors need to make a good question is the stock price recorded at the and accurate assessment to find out and end of each year after the closing price. The choose the company's shares. With stock price of a share at any given time will price movements that tend to fluctuate from depend on the cash flow an investor is time to time, if the stock price rises, expected to receive in the future if an investors will get a profit and also increase investor buys a stock. The share price is a investor confidence in the company for the reflection of the performance of a company. increase in shares. A reflection of how to In a short period, the price of a stock can see the high and low levels of the company's fluctuate greatly. The price fluctuates stock price movements can use the Stock depending on the power of supply and Price Index (IHS). The Stock Price Index demand. If a stock experiences excess (IHS) serves as one of the market trends, demand, it will tend to rise, and vice versa. where the index movement describes market The end of the closing period of the stock conditions at any one time, whether the price is an appropriate reference in market is active or sluggish. comparing or analyzing a study. Earning per Share is very important because it is an income for investors and a Stock Price Indicator benchmark for investors to invest in the The stock price indicator can be seen company. The high value of Earning per from the value of the stock price, according Share (EPS) will increase investors' to Azis et al. (2015), namely: confidence to increase their investment 1. Book Value is the value of shares which is needed by each company. High according to the books of the issuing Earning Per Share (EPS) is a measure of a company. Book value per share is the company's ability to earn a profit, so it can net assets owned by shareholders by be said that the higher the profit of a owning one share. company, the higher the amount of Earning 2. Market Value is the stock price that Per Share (EPS) that will be distributed to occurs on the stock exchange at a time investors who invest it. determined by the demand and supply Any change in Dividend Yield (DY) price of shares by market participants. will affect stock prices. If these investors 3. Intrinsic Value is the actual / supposed intend to keep the stock forever, the investor value of a stock. International Journal of Research and Review (ijrrjournal.com) 236 Vol.8; Issue: 1; January 2021 Muhammad Fauzan Mirzaldi et.al. Analysis of Earning Per Share on Stock Prices with Dividend Yield as an Intervening Variable in LQ45 Companies in Indonesia Stock Exchange. 4. The intrinsic value of an asset is the sum and as an investment filter. They will try to of the present value of the cash flows invest their funds in stocks that produce generated by the asset concerned. high dividend yields. Dividends are usually distributed annually and the dividend yield Dividend figure is obtained by means of the dividend Dividends are the rights of common value that will be given to the price of stockholders to receive a share of the shares currently in circulation. company's profits. Dividends are cash flow set aside for shareholders, while retained Earning Per Share earnings are one of the most important Investors will be more interested in sources of funds to finance company companies that have high earnings per growth. The size depends on the dividend share, and if the earnings per share of a policy and the results of the company's company are considered high by investors, AGM. If the company has decided to share the stock price will move up. According to the profit, then all share owners will get the Gitman and Zutter (2015), earning per share same rights according to their percentage of represents the amount of money earned per share ownership. However, the distribution number of ordinary shares outstanding in a of dividends for preferred stock owners will certain period where if it gets higher it has be prioritized over common stock owners. the potential to increase the amount of dividends received by shareholders. Dividend Yield It can be seen that the relationship According to Gumanti (2013), between earnings per share and share price dividend yield implies a measure that a is very close. Tandelilin (2010) argues, component of total return is contributed by Earning Per Share (EPS) can be formulated dividends. This means that in calculating the as follows: total return, investors must include the element of the amount of dividends received in addition to the difference in share prices between the beginning and the end of ownership. Meanwhile, according to Buying shares means buying the Fajrihan (2010), dividend yield is dividends prospect of a company, which is reflected in paid divided by the current price. Based on earnings per share. If the earnings per share the understanding of the experts above, it is higher, then the prospect of the company can be concluded that the dividend yield is a is better, meanwhile if the earnings per financial ratio that compares the amount of share is lower it means that it is not good, cash dividends distributed to shareholders and negative earnings per share means it is with the share price, which is expressed as a not good (Samsul, 2006). percentage.
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