Although the return they provide to investors is not as direct and certain as dividends, Stock buyback programs are a great way to build investor wealth.
(I have to say that what’s in this email represents my opinion only and it’s purely for your information. Also, always seek advice from registered investment advisors before investing and read this important disclaimer.)
Share repurchase programs are also more tax efficient as capital gains are usually less taxed than dividends and assuming that you don’t sell shares until you retire and have minimum revenues, the tax effect will be close to nothing.
In this particular case, I want to point out that TFSL (TFS Financial Corp) will be repurchasing 19% of their public shares over the next 6 months.
This is an enormous amount of shares and we can expect some stock price fluctuation but as usual, there is nothing guaranteed. Note that the stock is 12% down since the beginning of the year.