I used to also agree that all the arguments against buybacks apply to dividends, but I've since changed my mind. On the surface level, they are identical → cash is transferred from company to shareholders.

But the way the cash is transferred matters, and it has second order effects. Specifically, as it impacts stock options.

Executives tend to be compensated with options. The more the stock goes up, the richer they get. Distributing $X in dividends should provide an equal total return to the average shareholder as spending $X on a buyback, but that buyback will do it by pushing up the share price.

As the share price goes up more and more, execs with options have disproportionately more to gain than the average shareholder. They have a leveraged exposure to the price!