From the company's perspective, dividends and buybacks are economically equivalent (i.e. they are giving a certain quantity of cash to shareholders) However, f

From the company's perspective, dividends and buybacks are economically equivalent (i.e. they are giving a certain quantity of cash to shareholders) However, from the shareholder perspective, buybacks are more tax-efficient since those who sell their shares pay taxes on the gains, and those who hold end up with a larger share of the company and no tax. This is all according to theory. In practice, there does also seem to be a sort of received wisdom among managers that buybacks are better for companies because they can cut them in times of trouble, whereas investors will perceive cuts in dividend as somehow foretelling bankruptcy.