
Financial Performance and Stock Return Relationship: An Analysis of BIST Energy Sector Companies
Chapter from the book:
Ok Ergün,
H.
(ed.)
2025.
Current Research on Financial Performance.
Synopsis
The fact that economies have been in a continuous growth trend over the years and the population density has been increasing steadily increases the need for energy and natural resources. The fact that the energy foreign trade deficit is constantly increasing in our country brings along the attempts of companies in the energy sector to reduce this deficit to some extent. can be considered as a situation. Some of the companies operating in the energy sector produce energy directly using natural resources, while others make energy renewable by pioneering technological developments. Firms in the renewable energy sector appear to be more attractive in terms of attracting investors. The situation in which firms show high financial performance and attract more investors, and vice versa, the situation in which firms show higher financial performance by attracting more investors, will both have a positive impact on the service production capacity of firms and allow firms to grow financially. This study aims to reveal the relationship between the financial performance and stock returns of firms in the energy sector whose stocks are traded on Borsa Istanbul. In the study, the existence of the relationship between the financial performance ratios of the firms in 2023 and the stock returns of the related firm in 2024 is analyzed with the help of multiple linear regression analysis. It is found that there is a positive and significant relationship between stock returns and return on equity among the financial performance ratios, while there is a significant but negative relationship between stock returns and market capitalization to book value ratio. The fact that the return to investors and stock returns show the same directional relationship can be considered as an expected situation in terms of finance literature.