(Smart Money) — On paper, share repurchases are worth more to investors than dividends. In practice, I believe investors are better off with dividends. Whether that’s still the case next year depends on Congress. Dividends and share repurchases are both used to periodically transfer company profits to shareholders. With dividends, the transfer is made in the form of a cash payment. Repurchases are used to retire outstanding shares, which increases earnings per share (because they’re calculated using fewer shares).
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