Nowadays, information on stock price movement has become paramount in making an investment decision; and a good knowledge of the factors that determine stock prices and the ability to predict stock prices are added advantages in the developing economies. Therefore, this study seeks to determine the impact of earnings on the stock price of healthcare firms in Nigeria. The study relied on the linear panel modeling approach of fixed effect and random effect while the Hausman test was applied for the model selection. The panel data set used for the study was sourced from the NSE annual fact book for the periods 2011 to 2020. The result of the random effect model estimated revealed that earnings per share (EPS), dividend yield (DDY) and firm size (FSZ) have no significant impact on the stock price of healthcare firms in Nigeria. The only exception is book value per share (BVPS) which is positive and had a significant impact on the stock prices of healthcare firms in Nigeria at the 0.01 significant levels. This study, therefore, concludes that BVPS is the perfect predictor of stock price movement in the healthcare sector. As a result, the study recommends among other findings that Book Value per Share should be considered when making investment decisions in the healthcare firms in Nigeria.
Earnings, Stock price, Dividend Yield, Book Value per share, firm size and Developing Economy
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