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There is an additional difference beyond the tax advantage. With dividends, the market has more expectation of maintaining similar level of dividends, whereas t
by drivebycomment 3y ago
There is an additional difference beyond the tax advantage. With dividends, the market has more expectation of maintaining similar level of dividends, whereas there's generally and currently no similar expectation on companies doing the share buyback to buy similar amounts quarterly. This allows a bit more flexibility on the company. This extra flexibility may or may not be a good thing, but regardless, it is an additional meaningful difference.
- ghaff 3y agoFair. And, historically, companies known for being consistent dividend stocks got hammered if they cut back. Which, as you suggest, may or may not have been a good thing in general. Whereas buybacks haven't really acquired the same level of X% per quarter. (And, in fairness, is inevitably caught up with questions of whether the stock is "fairly" priced.)