Both dividends and stock selling are normal income tax rate if you've held the stock for less than 6 months and capital gains rate if you've held for more.
Buybacks inflate the stock price, making what you're holding more valuable, even if you don't sell. More valuable assets are useful for all sorts of things, including leveraging them for other activities, or selling them for capital gains.
You are right that you can leverage them in all sorts of ways, but that isn't really what anyone means by making money. It is how you drown folks in leveraged debt that they can't pay back later, of course.
Money has time value.
A bigger downside of dividends is that you can't offset qualified dividends income with capital losses (except up to the $3000 annual limit). And compounding is different because you pay tax only at the end rather than every year. But those are different issues.
While I'm at there's the additional wrinkle that being able to actually get a significant LTCG rate difference by deferring the income really depends on structure of your future income and when in your lifetime you will sell.