grumpy
Thinks s/he gets paid by the post
- Joined
- Jul 1, 2004
- Messages
- 1,321
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?
Any insights?
Grumpy
"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?
Any insights?
Grumpy