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Why Dividends Trump Buybacks

Though both are preferable to accumulating cash, paying dividends is a better method for preserving shareholder value, says Morningstar's Matt Coffina.

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Jeremy Glaser: For Morningstar, I'm Jeremy Glaser. Many management teams have been focusing on share repurchases versus dividends in recent years. I'm here with Matt Coffina--he's the editor of Morningstar StockInvestor newsletter--to hear how he thinks about the differences between the two. Matt, thanks for joining me.

Matt Coffina: Thanks for having me, Jeremy.

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Matthew Coffina has a position in the following securities mentioned above: GOOG, CME. Find out about Morningstar’s editorial policies.