Buybacks The danger of inconsistency

Dividends or share buybacks? Faced with growing cash piles and a limited appetite for acquisitions, a lot of companies in the US and Europe are trying to decide the most effective way to deliver extra cash to their shareholders. Buybacks are taking up a big share. They accounted for half of all the cash distributed in the US in 2004, and a quarter of the UK payments. The preference for buybacks partly reflects some tax advantages and the desire not to have to cut dividends. But their popularity ...