How to tell if a company ‘share buyback’ makes sense

Share buybacks – when companies buy their own shares on the stock exchange and cancel them – are all the rage again. In America, they are back at the same levels that we saw before the financial crisis, according to data firm FactSet. They are very popular here in Britain too.

So let’s make one thing clear right away. We don’t like buybacks. If a company wants to ‘return cash to shareholders’, we’d rather have a dividend payout. This is money in the bank that can’t be taken away again in the future.

The truth is that buybacks [...]

MoneyWeek magazine

Latest issue:

Magazine cover
Paying by mobile

Why your phone will replace your wallet

The UK's best-selling financial magazine. Take a FREE trial today.
Claim 4 FREE Issues
Shale gas 'fracking' promises to transform Britain's energy market. Find out what it is, what it means, and how to invest.

Which investment platform?

When it comes to buying shares and funds, there are several investment platforms and brokers to choose from. They all offer various fee structures to suit individual investing habits.
Find out which one is best for you.