Thursday, November 16, 2006

Dividend Increases vs.Stock Buybacks

Last month Standard and Poor's reported dividend increases had slowed while stock buybacks were continuing at a strong pace. Certainly, this is a trend worth watching. Like dividends, stock buybacks do benefit investors. The issue with stock buybacks is this type of action is not a long term commitment by a company; therefore, buybacks should have less weight, by an investor, in determing a dividend growth stock's future price performance, i.e, the company's long term growth prospects.

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