| ▲ | throw-qqqqq a day ago | |
Even for companies that do not pay dividends, buybacks should increase the value of each share, because you share profits with fewer other shareholders. Buybacks raise the EPS/earning-per-share by lowering the denominator (number of outstanding shares). EDIT: If P/E stays the same, but the E (earnings) grows, the P (price) has to grow too. I think it’s quite uncontroversial to equate buybacks with dividends. Personally, I prefer dividends, even if they’re suboptimal tax-wise. | ||