Share buybacks by the world\u0027s biggest 1,200 companies have tripled in a decade to rival dividends in scale. Find out more
Daniel Peris, a fund manager at Pittsburgh-based Federated Hermes Inc., called buybacks an “environmental hazard.” He added that “the dividend is just the dividend: grandma benefits, the long-term holder . Buybacks benefit traders, hedge funds, senior executives near-term share prices.”
Abrie Pretorius, a manager at Ninety One Ltd., said: “Buybacks only create value for remaining shareholders and strong relative performance when shares are cheap and there are no better uses of that cash which would generate higher returns. Most buybacks help optical growth, but destroy value.”Article content
“The approach we have seen in the U.S. to generally prefer buybacks could be problematic if it takes root in the U.K.,” said Michael Stiasny, M&G Investments’ head of U.K. equities. “The likely outcome would be that the market ends up yielding permanently less than it could.”Article content Lindsell Train Ltd. co-founder Nick Train said the benefit of buybacks depended on the purchase price, but they could be “a wonderful way for a board to build enhanced wealth for long-term shareholders.”
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