Dividends are always going to be more Common shareholder friendly, While acquisitions are always going to be more insider corporate friendly. HPQ is another perfect example. The overvalued EDS purchase had to be practically written off from the balance sheet. Billions of dollars burned at the altair of capitalism for the purpose of enriching insiders with bonuses and other kickbacks at the expense of public common shareholders. Instead of paying those billions out as dividends, they chose to pick your pocket and steal some money. While common shareholders hold the bag. That is why when EDS was acquired, it raised a red flag in my opinion. Tip for investors, anytime you see a company spending big money on acquisitions, start unwinding your positions ahead of the train wreck. Or suffer the wrath. HPQ Investors have lost over 60% of their investment since the EDS acquisitions. APPLE is a perfect example of a company who has not recklessly perused acquisitions for the purpose of enriching insiders at the expense of public common shareholders. Notice how AAPL has grown and now did the prudent thing, announce a dividend program.
Apple develops their own products though, they have no or next to no use for an acquisition, what about Walgreen's? They bought Alliance Boots (I thought they were a boot making company too, but they're not, they're a pharmacy too), one of the biggest or the biggest pharmacy chain in Europe. WAG spent about $6.5 billion to buy Alliance Boots, you can't make a newer better pharmacy, just get more of them. Depends on the business model, not all acquisitions are bad, just a lot of them.
Great point, they can't be ripping themselves off! I am getting a very bad reading/feeling about the next couple of years in particular. The increase in wealth for "the rich" in the past 20 years was mostly about senior corporate salaries, laying off the poor and the workers, and borrowing to the hilt for companies. This next fall should destroy asset value everywhere as the rich are the owners and will get tagged big time. All the toys must go back in the box again and we start over. There would be a smug irony that those most corrupt will share the same fate as those with the least assets. At the end of the day, paper is worth only what paper is worth. Trust is worth much much more.