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This model simulates the gain/loss to long-term shareholders from making a single share buyback, compared to making a dividend payout for the same amount of money. All future earnings are assumed to be paid out as dividends.

This model simulates the future share-prices using P/E (Price-To-Earnings) ratios which are ill-defined if the earnings are zero or negative. If you need to simulate zero or negative earnings then use another model instead.

• Sim
• Sim Vary
• Dist 1
• Dist 2

• ROIV
• ROB

• This violin-plot shows the Return on Intrinsic Value (ROIV) for investment periods between 1-10 years, when making a share buyback now for at the current share-price of , as opposed to using the same amount of money to make a dividend payout now.
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ROIV is invalid when the intrinsic value is zero or negative. ROB also works in those cases.
If there are losses in some simulations, then the red boxes on the bottom show the probability of loss for each future year.

• This violin-plot shows the Return on Buyback (ROB) for investment periods between 1-10 years, when making a share buyback now for at the current share-price of , as opposed to using the same amount of money to make a dividend payout now.
More
If there are losses in some simulations, then the red boxes on the bottom show the probability of loss for each future year.

• ROIV
• ROB

• This plot shows how different share-prices at the time of the share buyback would impact the Return on Intrinsic Value (ROIV) for all investment periods between 1-10 years, when making a share buyback for , as opposed to making a dividend payout for the same amount.
More
ROIV is invalid when the intrinsic value is zero or negative. ROB also works in those cases.
The x-axis shows a range of share-prices around the current share-price of , which is marked as a dashed blue line.
The red box at the bottom shows the probability of loss, if a share buyback is made now at the current share-price of , when considering all investment periods between 1-10 years.

• This plot shows how different share-prices at the time of the share buyback would impact the Return on Buyback (ROB) for all investment periods between 1-10 years, when making a share buyback for , as opposed to making a dividend payout for the same amount.
More
The x-axis shows a range of share-prices around the current share-price of , which is marked as a dashed blue line.
The red box at the bottom shows the probability of loss, if a share buyback is made now at the current share-price of , when considering all investment periods between 1-10 years.

• These plots show the probability distributions for individual simulation years.
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The dashed blue lines show the median P/E ratios calculated from the simulated Earnings in each year, and the current Market-Cap (current share-price X number of shares) minus the Excess Cash. This lets you easily see if there is likely going to be a future loss or gain from re-valuation of the stock's P/E ratio.

These plots show the probability distributions that are common for all simulation years.