CAPITAL INTENSITY AND STOCK RETURNS OF LISTED MONEY DEPOSITBANKS IN NIGERIA

Abstract

The study investigated the effect of capital intensity on stock returns of listed money deposit banks in Nigeria. The study employed the ex post facto research design and was anchored on the signaling theory. It proxied capital intensity (the independent variable) using property plant and equipment, intangible assets and long term investments. Stock returns (the dependent variable) was measured using earnings per share. The study used a sample of ten (10) listed banks in Nigeria, which were purposively selected. The data collected and used for the study was for a period of 11 years from 2013 to 2023. The panel regression technique was employed in testing the hypotheses formulated. Descriptive and correlational analysis were also carried out. The major findings revealed that all the independent variables had negative effects on the dependent variable but only PPER was significant. The study concluded that increasing levels of investments in plant and machinery would lead to decrease in stock returns while intangible assets intensity and long term investments had negative but not significant effect on stock returns. Accordingly, it was recommended that: (i) banks should not increase in property, plant and equipment intensity as it would not affect their stock returns.