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 [...]
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