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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Some companies do stock buybacks the right way that are beneficial for shareholders(Aflac for example).
A good deal of companies do not, by buying back shares while also still expanding outstanding shares, by issuing more via executive compensation for example.
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