The Influence of Profitability, Dividend Policy, and Firm Age on Valuation of Energy Sector Firms Listed on the Indonesia Stock Exchange from 2019 to 2023

Abstract

In recent years, the valuation of energy sector businesses on the Indonesia Stock Exchange (IDX) has exhibited volatility due to COVID-19 and international concerns.  Profitability, dividend policy, and the company's age are considered to influence the valuation of firms in this industry.  Nonetheless, the impact of these three criteria on the valuation of energy companies in Indonesia has not been well investigated.  This study seeks to assess the influence of profitability, dividend policy, and company age on the valuation of energy firms listed on the IDX from 2019 to 2023. The findings of the classical assumption testing indicate that the data are appropriate for regression analysis.  Partial testing findings (t-test) demonstrate that only the profitability variable significantly influences firm value, with a computed T of 3.859 exceeding the T table value of 2.003 (3.859 > 2.003).  The dividend policy variable and the company's age do not exert a significant influence, with significance values of -1.107 and -0.460, respectively.  The concurrent test results (F test) indicate that only the profitability variable significantly influences company value, whereas the dividend policy and company age do not significantly affect stock prices, evidenced by a significance value of 0.000, which exceeds 0.05 for the profitability variable.  The coefficient of determination (R²) is 0.557, or 55%, indicating that profitability, dividend policy, and business age collectively account for 55% of the variance in company value, whereas 45% is attributed to other variables not examined in this study.  This study shows that from 2019 to 2023, only profitability has been demonstrated to affect the value of energy sector businesses listed on the IDX, whilst dividend policy and company age do not exert a meaningful influence.