Dividends are Better Than Buybacks, page-24

In my own words, it is about tax timing and tax amount.

A dividend imposes a tax liability. A capital gain defers a tax liability.

Franking credits are great, but doesn't mean anything to international shareholders and only partially helps if you're a local at a high marginal tax rate.

For locals, holding for more one year means paying capital gains tax at half their marginal tax rate. Hard to beat unless you're well structured or in super.

As with many investing discussions here, it comes down to time horizon. For traders, the sugar hit from dividends is probably better over the short term. For investors, the long term benefits of buybacks at low single digit multiples is even better over the long term.

People's preference for dividends or buybacks tells me something about their tax rates and time horizons, and less about which is better. Because it mostly depends on your individual circumstances.

I prefer buybacks because that is best for me. You may be different and that is okay.