Companies announcing share buy backs and extra dividends are good for shareholders

Their shares are likely to outperform on a 12 and 24 months horizon. We know this from US research, but from now onwards we have local data and stats to support the thesis for Australian companies. Macquarie analysts did the hard yakka, researching more than 400 capital management initiatives by corporate Australia over the past 20 years. The statistics are more than convincing. Capital management is an important driver for total investment returns. Two conclusions stand out from the Macquarie research: 1. it doesn't always work, but it does in most cases; 2. contrary to popular opinion, buying back own shares works better for expensive stocks (i.e. High PE) than for cheap stocks (i.e. Low PE). Read more about it in my Weekly Insights: (VIEW LINK)


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