Sunday Spectacle CLXXIX

Stock Buybacks & Dividends
1988 to 2010

Dividend payouts have not increased much over the 20+ years while buybacks have increased significantly. During the bubbly peak in 2007, more than $500 billion worth of shares were bought back—ironically at really high stock prices!!—whereas dividend payouts hit a little over $200 billion. Senior management and financial executives have no clue what they are doing when it comes to buying back shares (their buying is highly correlated with stock prices, which is not what you want).

Note that the figures are in millions i.e. In 1988, dividends of $100 billion were paid out while $50 billion worth of shares were bought back.

(I wrote a post on dividend payouts back in 2009 and some of you may be interested in that post as well.)

(click on image for larger one; quality isn't great)


(source: "Value Investing: Investing for Grown Ups?" by Aswath Damodaran, Stern School of Business, New York University. April 2012.
Electronic copy available at: http://ssrn.com/abstract=2042657)

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