In the purest sense a buyback should only be happening when the company has cash and the best investment for that cash is their own shares. The overall shareholder return should be better for that bit of cash than alternatives such as paying down debt, buying other assets - either another company or developing their own asset. Clearly there is already an allocation to developing their own asset, the BB is over and above that. Ideally the lower dividend "now" should be outweighed by a bigger dividend "later".
In a well run company, they will know what their shares are worth when assessed by various metrics. NPV for example. And they will buy back only up to that point.
I would suggest that so far what we have seen is fully consistent with all of the above.
FMG Dividend, page-54
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Last
$17.50 |
Change
0.840(5.04%) |
Mkt cap ! $53.88B | |||
| Open | High | Low | Value | Volume |
| $16.89 | $17.74 | $16.84 | $346.2M | 19.88M |
Buyers (Bids)
| No. | Vol. | Price($) |
|---|---|---|
| 3 | 5870 | $17.48 |
Sellers (Offers)
| Price($) | Vol. | No. |
|---|---|---|
| $17.50 | 12148 | 3 |
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| Last trade - 16.10pm 13/09/2024 (20 minute delay) ? |
| FMG (ASX) Chart |