Stock buybacks are more efficient for stockholders than dividends. I can choose to "harvest" a portion of my investment in ISRG when I want if the company buys its own stock. The seller to the company pays capital gains taxes if any, not me. Theoretically if the company buys back half of the shares then the earnings would be owed to the remaining shareholders and each share has ~twice the earnings. P/E's being equal for the companies performance and future prospects, the share is ~twice it's original price.
If the company pays dividends then I have to pay taxes (state and federal) on those dividends as current income. With the new Obamacare surcharge tax and treatment of dividends they are treated as regular income with a 3.8% surcharge kicker. Even for a middle class person, this means his tax rate on dividend goes from 15% to 31.8% (federal only). Which is better 0% (stock buyback), or 31.8% (dividends)?
A dividend is taxed at the Corporate level, and then taxed again when you receive it. Do you really think that is a wise choice for Intuitive to consider? If you are a long term holder, wouldn't it make more sense to allow the managers of Intuitive to use that money to increase the value of the company?