How are stock buybacks any worse than dividend payouts to investors?
I get how they are logistically different, but to me, whether you give the investors cash that they use to buy more stock, or you internally increase the value of a stock by buying it back with company funds, the result is the same – Investors get richer at the cost of investment.
Not saying buybacks aren’t bad, but I guess I just don’t understand the hate relative to dividend payments.
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Stock buybacks are basically a way of saying “hey, we have extra money, but investing more money into the business won’t make us more money than just buying stock to bump up the share price.” SP500 companies are priced around pretty high expected growth, so it can reflect badly on the company’s lack of faith in their own business
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