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Do the maths on buybacks. They benefit the BOD by increasing the EPS even when the Company makes no extra revenue. SP drops but directors receive bonuses for rise in EPS - same revenue fewer shares = increase in EPS. They benefit, you don't. Give higher dividends, doesn't improve Company but it's money in your pocket not theirs.
Buffa, spot on. There are still people who regurgitate "buybacks put money into our pockets" nonsense, said as BP is still nailed to its perch below 500p.
The whingers always appear sub £5, it's an opportunity to trade when the share returns to £5+ in the not too distant future.
Have been in BP fir several decades but sold out at £5.10 recently because i can beat the divi yield easily with no risk and I have no faith in BOD. Not a whinger just a disillusioned once LTH who's finally fed up with BOD bonuses while their investors pick up the tab. Do the maths on buybacks over the years v SP. Open your mind.
Penny flipping BP for a few % and collecting a divi yield no higher than the risk-free rate...That's a stroke of investing genius.
Do they call you Charlie Buffet down your local?
"because i can beat the divi yield easily with no risk and I have no faith in BOD"
I know, It's amazing how UK investors will take equity risk on a stagnant stock to collect a divi yield no better than the risk-free rate. Americans would scratch their heads...
Foggy, I've traded this repeatedly over the last 18 months. Making a few % every time plus dividend soon adds up. You should try it, but you probably haven't got the cojones.
charlie buffet, or you could have just bought big tech in 2022 (not even obscure stocks) and watched them multibag, without s*****ing all day at charts to penny flip bp. but if you actually enjoy doing that, then carry on i guess :)
i hold stocks like petrobras, nio and tullow on margin so "trading" bp stock for +/-10% just wouldn't arouse me i'm afraid.
Trading on margin tells me all I need to know! :D
Moggy, how do you know what I have in my portfolio. Trading BP takes up a minimal amount of my time and capital. Coming on here dishing out out unsought investment advice puts you in the 'Clowns to be avoided 'category.
Ooh meow Charlie Buffet...Pass me the Carver and the big pack of Tyrrells, it's a girls' night in!
Nor quite, Buffa.
Buybacks mean that there are fewer shares in total. This benefits the remaining shareholders (us!) as we own a bigger percentage of the company.
Buffa,
The BOD are also shareholders due to share bonuses, so they are incentivised to do things to help shareholders.
As you state, a bigger dividend would not help the company. Glad that the BOD will only increase the dividend when it can afford it and is sustainable.
Fogthemogg,
What would the price be without the buybacks? Lower, for certain.
You're correct Harmonica, it would be lower,but that just serves to show how bad the BOD are at BP
"This benefits the remaining shareholders (us!) as we own a bigger percentage of the company."
And why would a retail investor care about that infinitesimally small difference?
I think they'd much rather have the 1999 share price and old dividends.
"And why would a retail investor care about that infinitesimally small difference?"
So NOW you are not arguing against buybacks in principle, but that they are NOT big enough for you!!
Make up your mind, please!
Harmonica, that's a real non sequitur.
If it wasn't clear the first time. I'll try again. What monetary benefit does this infinitesimally small change make to a retail investor's life?
Or do you simply derive personal satisfaction from knowing that now you own 0.0000000000000000000000001% (being generous there) more of BP's outstanding stock than you did a few years ago?
Buff
'' sold out at £5.10 recently because i can beat the divi yield easily with no risk''
why are you still here then - goodbye
Fog
''why would a retail investor care about that infinitesimally small difference?''
? - you need a rethink
Fog
''What monetary benefit does this infinitesimally small change make to a retail investor's life?''
small? - once again think again.
as well as increasing a shareholders ownership by a good percentage,whilst buybacks are a preference , eps will increase, and thereby contributing towards further increases in dividends per share. At a point where the BOD's feel that share repurchases are not at such bargain levels and therefore suspend them, then at that point monies would be redirected to further increases in dividends . Buybacks are a great benefit at bargain price levels for shareholders staying for the longer term. If an investor does not like them then there are plenty of alternative investment options for them to pursue.
Fog
''infinitesimally small''
In May 2021 there were about 20.24 Billion shares in issue
Today there are about 16.75 Billion shares in issue.
A shareholder retaining the same amount of shares in that period would have seen their percentage ownership increase by over 17% and increasing each buyback day and you call that -''infinitesimally small''
You are CLUELESS
Longtimeinvestor, you're dancing around the crux of the issue without succinctly addressing it. Explain how buybacks put more money into the pockets of retail investors? That's a rhetorical question of course, because they don't.
That's cute that you have a certificate framed in your toilet, proudly stating you own a greater % of BP's outstanding stock than a few years ago. But so what? How did that make you richer? If the BOD maintain a bias of more buybacks, rather than pay higher dividends, then who do you think it really benefits? Cui bono?
But talking of "clueless" and seeing as you're a "long time investor", or did you mean a long-term investor? Cast a glance at how much more money you would have made simply buying Chevron and Exxon over the last 20 years instead? It will make extremely painful reading...
Speaking from experience, the BP buyback cultists almost always turn out to be former employees. Objective global investors would not sing the praises of BP as a long-term investment; unless one only bought at pandemic lows it is self-evident why. Even UK institutions have been underweight BP, they correctly looked across the pond instead. That's why the share price is still languishing below pre-pandemic levels, or didn't you notice? The share price never even recovered from the Deepwater disaster, we had a clueless CEO back then too. Some things never change...
There should be a golden rule on stock forums - you can't use hindsight to back up your arguments. We'd all be rich if we had it.