The S&P 500 Total Return (dividends reinvested) would have been 10% lower if buybacks subbed with dividends.

But, are stock buybacks a good thing for shareholders? Yes, if done at a price below the intrinsic value of the company.

Buybacks are a good substitute for dividends, because they are not double-taxed like dividends. And if the buyback program is suspended, there are few consequences, whereas a dividend cut is usually bad news.

Image: Ned Davis Research