In theory yes, repurchasing shares should do just as well as paying out dividends.
In practice, no.
Most companies are run by people who are utterly bad at allocating capital. They will buy stock back when it is overvalued, when it is trading towards its high because they feel on top of the world and unstoppable. They are almost always making a grave mistake.
Share buybacks need to be used like Henry Singleton at Teledyne:
You buy back stock when it is trading towards its lows and likely undervalued.
You issue stock and use it as currency for acquisitions when it is trading near highs so that you take advantage of its overvalued status in the market place.
Singleton showed how to properly allocate capital in tech and do it in a way that enriches everyone. That's why most people today look to what he did at Teledyne as models for best practices in capital allocation.
It's not really about high and low, it's more about valuation. If you can peg your valuation at $20 per share based on a variety of factors related to your revenue, free cash flow, discounted growth, etc., but your stock is trading at $12/share, your company is undervalued and a share repurchase may be a good idea. But if your stock is trading at or above $20/share, yet you can't make the case that your company is actually worth more than $20/share, it's foolish.
In practice, no.
Most companies are run by people who are utterly bad at allocating capital. They will buy stock back when it is overvalued, when it is trading towards its high because they feel on top of the world and unstoppable. They are almost always making a grave mistake.
Share buybacks need to be used like Henry Singleton at Teledyne:
You buy back stock when it is trading towards its lows and likely undervalued.
You issue stock and use it as currency for acquisitions when it is trading near highs so that you take advantage of its overvalued status in the market place.
http://en.wikipedia.org/wiki/Henry_Earl_Singleton
Singleton showed how to properly allocate capital in tech and do it in a way that enriches everyone. That's why most people today look to what he did at Teledyne as models for best practices in capital allocation.