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Micron Technology, Inc. Message Board

  • the_stock_warrior the_stock_warrior Sep 26, 2013 8:21 AM Flag

    Dividend versus Buyback

    There's yet another SA article saying MU management would be crazy not to do a big buyback.

    I disagree.

    If MU is at $20 per share with no dividend, and MU were to announce a $1.00 per share annual dividend, this would yield 5%. If the market then jumped the stock on the good news to yield 3% (still very nice), MU would be priced at $33.33 or a gain of over 66%!

    A 5% buyback would leave the dividend at zero and the stock with a value of around $21.

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