The Effect of Price Earning Ratio, Dividend Payout Ratio, and Debt to Equity Ratio on Firm Value in Non-Cyclical Consumer Companies

Article Sidebar

PDF
Published: Feb 2, 2026
DOI: https://doi.org/10.15575/ijni.v14i1.51473
Keywords:
company value, debt to equity ratio, divident payout ratio, price to earnings ratio, Sharia capital market

Main Article Content

Muhammad Tsani Abdul Hakim
UIN Sunan Gunung Djati Bandung
Depi Hasanah
UIN Sunan Gunun Djati
Muhammad Anton Athoillah
UIN Sunan Gunun Djati
Setia Mulyawan
UIN Sunan Gunun Djati
Iwan Setiawan
UIN Sunan Gunun Djati

Abstract

The growth in the number of sharia investors and the increase in the market capitalization of sharia stocks in Indonesia reflect a high interest in Islamic-based investments, particularly in the defensive primary consumer goods sector (non-cyclical consumer goods). Amid this trend, it is important to understand the fundamental factors that influence company value, so that investors can make more rational decisions and company management can increase their stock market value. This study aims to examine the effect of Price to Earnings Ratio (PER), Dividend Payout Ratio (DPR), and Debt to Equity Ratio (DER) on company value, proxied by Price to Book Value (PBV), in non-cyclical consumer sector companies consistently listed in the Indonesian Sharia Stock Index (ISSI) during the 2016–2020 period. The study sample consisted of 15 companies with a total of 75 panel data observations. The analysis was conducted using panel data regression with fixed effects. The results showed that DER had a significant positive effect on company value, whereas PER and DPR did not. Simultaneously, these three variables influenced company value. These results reinforce signaling theory, where a high debt structure can be perceived as an indicator of management confidence in the company's prospects. This research contributes to the growing literature on Islamic finance, focusing on strategic and stable sectors in the capital market.

Article Details

Issue
Vol. 14 No. 1 (2026): International Journal of Nusantara Islam
Section
Articles

The Authors submitting a manuscript do so on the understanding that if accepted for publication, copyright of the article shall be assigned to International Journal of Nusantara Islam, Sunan Gunung Djati State Islamic University.

The copyright encompasses exclusive rights to reproduce and disseminate articles in all forms and media, including reprints, photographs, microfilm, and similar reproductions, as well as translations. Some or all of the contents of this journal can be stored in databases and transmitted in any form and media without the need for written permission from the International Journal of Nusantara Islam, Sunan Gunung Djati State Islamic University.

The Editors and the Advisory International Editorial Board make every effort to ensure that no wrong or misleading data, opinions or statements be published in the journal. In any way, the contents of the articles and advertisements published in the International Journal of Nusantara Islam (IJNI) are sole and exclusive responsibility of their respective authors and advertisers.

References

Ardhani, I. A., Effendi, J., & Irfany, M. I. (2020). The effect of macroeconomics variables to Net Asset Value (NAV) growth of sharia mutual funds in Indonesia. Jurnal Ekonomi & Keuangan Islam, 134–148.

Aristawati, K. A., & Hariyanto, D. (2025). The Influence of Debt to Asset Ratio, Debt to Equity Ratio, Return on Assets, and Return on Equity on Firm Value in Financial Sector Companies Listed on the Indonesia Stock Exchange. Jurnal Manajemen Bisnis, 12(1), 195–210.

Brigham, E. F., & Houston, J. F. (2019). Fundamentals of Financial Management: Concise by Cengage. Cengage Learning.

Campbell, D. E., & Kelly, J. S. (1994). Trade-off theory. The American Economic Review, 84(2), 422–426.

Chapra, M. U. (2008). The Islamic vision of development in the light of Maqāsid al-sharī ‘ah. Islamic Research and Training Institute Islamic Development Bank Jeddah, DOI, 10.

Čihák, M., & Hesse, H. (2010). Islamic banks and financial stability: An empirical analysis. Journal of Financial Services Research, 38(2), 95–113.

Creswell, J. W. (2014). Research design: Qualitative, quantitative, and mixed methods approaches (4th ed.). SAGE Publications.

Dusuki, A. W., & Abdullah, N. I. (2007). Maqasid al-Shariah, Maslahah, and corporate social responsibility. American Journal of Islamic Social Sciences, 24(1), 25.

Gitman, L. J., Juchau, R., & Flanagan, J. (2015). Principles of managerial finance. Pearson Higher Education AU.

Gujarati, D. N., & Porter, D. C. (2009). Basic econometrics. McGraw-hill.

Indonesia Stock Exchange. (2022). Indeks Saham Syariah [Sharia Stock Index]. Indonesia Stock Exchange (IDX). https://doi.org/[in Indonesian]

Karasek III, R., & Bryant, P. (2012). Signaling theory: Past, present, and future. Academy of Strategic Management Journal, 11(1), 91.

Listyawati, I., & Ramadhan, R. (2017). Analisis pengaruh rasio keuangan terhadap nilai perusahaan [Analysis of the influence of financial ratios on company value]. MAKSIMUM: Media Akuntansi Universitas Muhammadiyah Semarang, 7(2), 1–10. https://doi.org/[in Indonesian]

Modigliani, F., & Miller, M. H. (1958). The cost of capital, corporation finance and the theory of investment. The American Economic Review, 48(3), 261–297.

Nirawati, L., Samsudin, A., Pradanti, A. P., Ayu, A. W., Jahzy, C. A., Saputri, I. D. I., & Prisichella, A. (2022). Analisis Pengaruh Kebijakan Dividen Terhadap Nilai Perusahaan [Analysis of the Influence of Dividend Policy on Company Value]. SINOMIKA Journal: Publikasi Ilmiah Bidang Ekonomi Dan Akuntansi, 1(2), 189–196. https://doi.org/[in Indonesian]

Otoritas Jasa Keuangan. (2021). Laporan Perkembangan Keuangan Syariah Indonesia 2021 [2021 Indonesian Islamic Finance Development Report]. Otoritas Jasa Keuangan (OJK). https://doi.org/[in Indonesian]

Rahayu, M., & Sari, B. (2018). Faktor-faktor yang mempengaruhi nilai perusahaan [Factors that influence company value]. IKRA-ITH HUMANIORA: Jurnal Sosial Dan Humaniora, 2(1), 69–76. https://doi.org/[in Indonesian]

Saputra, A., & Hafil, M. (2020). Prediksi Keuangan Syariah Global 2024, Indonesia Teratas [Global Islamic Finance Predictions for 2024: Indonesia Tops the Charts]. REPUBLIKA.CO.ID. https://doi.org/[in Indonesian]

Sartono, A. (2008). Manajemen keuangan, teori dan aplikasi [Financial management, theory and application]. https://doi.org/[in Indonesian]

Sekaran, U., & Bougie, R. (2016). Research methods for business: A skill building approach. john wiley & sons.

Shapiro, S. P. (2005). Agency theory. Annu. Rev. Sociol., 31(1), 263–284.

Sugiyono. (2017). Metode Penelitian Pendidikan Pendekatan Kuantitatif, Kualitatif, dan R&D [Educational Research Methods Quantitative, Qualitative, and R&D Approaches]. Alfabeta. https://doi.org/[in Indonesian]

Visser, H. (2019). Islamic finance: Principles and practice. Edward Elgar Publishing.

Weston, J. F., & Brigham, E. F. (1996). Essentials of managerial finance.

Wooldridge, J. M. (2016). Introductory econometrics a modern approach. South-Western cengage learning.