Investor Erkki Sinko believes that companies should prioritize dividend payments over share buybacks to retain investors in the stock market. He argues that focusing on distributing dividends provides more stability and security for investors during economic downturns. This approach can help attract and retain investors, ensuring ongoing support even when stock values are not seeing significant growth.
Sinko’s stance against share buybacks is based on his belief that these practices can be less beneficial for investors in the long run. While some may see share buybacks as a way to boost stock prices, Sinko believes that they do not provide the same level of stability and security as consistent dividend payments.
The Helsinki Stock Exchange has experienced low valuations and minimal growth in share values since the start of the year, with the general index currently down approximately two percent. However, Sinko’s perspective on the importance of dividend payments offers an alternative strategy for companies looking to maintain investor confidence and support in challenging economic conditions. By prioritizing dividends over share buybacks, companies can build stronger relationships with investors and create a more stable foundation for long-term success in the stock market.
In summary, Sinko’s stance against share buybacks highlights the importance of providing consistent dividend payments to attract and retain investors during economic downturns. By prioritizing dividends over share buybacks, companies can build stronger relationships with investors and create a more stable foundation for long-term success in the stock market.
