This study examines dividend policy and firm value in Indonesian Islamic banks within the context of limited empirical evidence on listed Islamic banking equities. The objective is to test the effect of the dividend payout ratio (DPR) on price to book value (PBV), using return on equity (ROE), capital adequacy ratio (CAR), non-performing financing (NPF), and firm size (SIZE) as control variables. Utilizing an explanatory quantitative approach based on panel data, the study analyzes BRIS, BTPS, PNBS, and BANK from 2020 to 2025, comprising 20 verified bank-year observations gathered from annual reports, financial statements, OJK statistics, and year-end stock prices. Estimation is conducted using the common effect model and fixed effect model with robust standard errors, complemented by the Chow test and sensitivity analysis. The results show that DPR has a significant negative effect on PBV in the primary model, while CAR and SIZE exhibit a significant positive effect. Sensitivity analysis reveals that NPF is significantly negative. The contribution of this research demonstrates that dividends in Islamic banks cannot be interpreted as a mechanical positive signal; rather, they must be evaluated alongside capital, financing quality, size, and growth prospects.