Oil Companies Buy High(
The WSJ had an article today headlined:
"Oil Giants Splurge for Investors Many Major Companies Make Share Buybacks as High Prices Leave Firms With Piles of Cash"
The article says the ExxonMobil, for example, will generate $22.5B in cash this year. XOM will likely increase its share buyback program and increase its dividend.
I'm fine with a dividend increase but I don't understand why it would be a good thing for investors in XOM for the company to buy back shares when its share price ($49) is currently higher than it has been for almost all of the last decade. I have owned XOM shares since 1995 and continued to DCA into them until 2003 when the share price reached $37. I would not be a buyer at the current price. Why does the XOM management team think this is a good use of the shareholders money?
...you can check out any time you like, but you can never leave...