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.
In: 98
Practically, stock buyback is the better option because it leaves each shareholder the choice to cash out or not, all the associated tax and trading fee implication etc. But, dividends feel like getting your earnings, while stock buybacks feel like money going to someone else.
And often, the complainers aren’t even shareholders, so it’s just a bunch of hot air.
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