Dividends are taxed at ordinary tax rates while capital gains are taxed at lower rates. Reducing the shares outstanding increases EPS, which drives the stock price up to generate capital gains. If the company's return on equity is greater than the investor can earn, the company should retain the money to generate even more income, benefiting stockholders (a la Warren Buffett at Berkshire Hathaway). If you want dividends for income, buy an electric utility stock.
You've obviously been "in the game" for quite awhile. I completely agree with your assessment here. Just to add a comment for those who are not as savvy.......this is called getting rich "slowly". Buying quality and holding onto it.
My position in Disney averages out to $8 a share (a combination of long term holding, buying on dips and the occasional stock split). With a 75 cent dividend, that's almost a 10% yield. Not to mention also, the importance to reinvest those dividends as additional shares. Buybacks and dividends are indications of a well managed company.
Hotstock is someone whose advice should be listened to. I commend you on being honest and forthright.