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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Dividends are basically like interest payments when you deposit money a kind of reward for putting your money with a group for a while, regular dividends are an indication of the long term growth and stability of a company. Stock buybacks are generally the company has a surplus of cash and has run out of ideas on where to spend it.
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