This is true, though tax reforms have made the distinction less relevant for the average investor (since dividends have been taxed at the capital gains rate for

This is true, though tax reforms have made the distinction less relevant for the average investor (since dividends have been taxed at the capital gains rate for most long-term investments since 2003). Regardless, there is still a benefit to buybacks on the order of a percent or two for large institutional investors as they move in and out of positions, so there is still pressure to distribute profits via stock buybacks as opposed to issuing dividends (see Apple's recent buyback programs as an example).