*Corresponding author. E-mail addresses: ahashemi78@gmail.com (A. Hashemi) © 2014 Growing Science Ltd. All rights reserved. doi: 10.5267/j.msl.2014.3.004 Management Science Letters 4 (2014) 1043–1050 Contents lists available at GrowingScience Management Science Letters homepage: www.GrowingScience.com/msl A study on relationship between dividend changes with future profitability Hassan Ghodrati and Abbas Hashemi * Department of Management and Accounting, Kashan Branch, Kashan, Iran C H R O N I C L E A B S T R A C T Article history: Received July 28, 2013 Accepted 14 January 2014 Available online March 8 2014 This paper studies the relationship between dividend changes and future profitability of listed companies in Tehran Stock Exchange. Using the information of 191 companies, the study has implemented some regression techniques. The results of the research model analysis indicate that the changes in dividend contain significant and important information content, for the future profitability and dividend changes, and have an important and positive impact on the future profitability of the company. The results also show that changes in dividend can improve the company's future performances and messages to recovery the activities and future performance of the company. However, the results have shown the greatest impact on the performance of the dividend changes, for a year after considered year and not for two years after. In other words, the information content of dividend changes are more about the performance of the next year and the information provided is lower in the next two years. © 2014 Growing Science Ltd. All rights reserved. Keywords: Profitability Dividends changes Profit growth 1. Introduction The increasing development and complexity of economic activities, the creation of various business units, the formation of independent legal entities and urgency in providing detailed information lead to the invention of different techniques in company evaluation. Simultaneously with development of accountancy, these methods and techniques have developed and provided to financial analysts and determiners. In the way of this development, the main role of researchers is clear to everyone. Researchers’ efforts along with the need of users for better and more scientific information have caused accountancy to go a step further of its traditional role in reporting the financial events and activities. In addition, investors and stakeholders of companies have always paid special attention to information published by them so that the major financial information published by financial statements and considered. Many researchers and market participants believe that the changes in divined or dividend policy have informational value about the company’s profitability. Therefore, it seems dividend and its changes have informational value about the company profitability.