I wrote the following to PPG.
Please copy and paste and add your sentiments as well.
The following statement please help me make sense of it.
"Since the beginning of 2010, we have used a portion of our expanded cash position to repurchase about 16 million shares of stock, reducing PPG's outstanding share count by nearly 10 percent, as we believe such repurchases are an excellent means to reward our shareholders."
How does it reward share holders? The reduction of shares ONLY REWARDS Management and people exiting the stock. Period, Jeremy. Please forward this to your board.
A distribution of a larger one time dividend that truly rewards share holders. Please spare us the self serving gesture by confusing it with such rhetoric. Perhap your CFO needs to you revise such statements to read "this helps PPG investors who want to sell and management make their EPS numbers rise so they can hit their numbers for bonuses, TRUTH BE TOLD!!".
A Concerned investor.
Historically, share buybacks raises share price for a number of reasons - 1. the float is reduced by the number of shares bought; 2. Cash sitting on the balance sheet isn't earning anything; 3. Dividend increase doesn't do much when the share price has risen as it has w/ PPG since October 2011.
I'm delighted that the company is buying back shares.
Different views on stock buy backs and who benefits from them. You probably seen this?
Dear Concerned Investor,
You apparently do not understand how stocks are valued and what drives the value of stocks. A one time increased dividend puts a little money in your pocket today, but PPG is a blue chip stock with a long history of increasing dividends, so would it really help the overall stock to have this one time disbursement? No, it would help you by putting an extra couple hundred dollars in your pocket. First, fewer shares in the market place means that when the dividend pool is determined, the dividend can be even higher than the usual 1 cent increase. Hence the 2 cent increase last year. Without buybacks, the shares would still be voluminous enough not to have the additional increase to the dividend. Second, it does help EPS. Do you think having an EPS that is 10 cents higher than expected doesn't increase the value of the stock? Of course it does. Third, it give the company shares in reserve that could be used in a stock split instead of having to issue more shares out of the authorized pool. And to add insult to injury you made a serious typo in your first sentence.