The increased earnings they may realize from paying less in dividends is trivial compared to the cash they have to use to buyback the stock.”””
Maybe for one dividend payment cycle-—but in the long run, NO.
The average dividend yield in the S&P 500 is around 2.2%. That means it will take 45 years for the dividend savings to equal the cash you pay out today, not even taking into account the time value of money.
All makes sense if you want to expand in half a century or so.