[Saaster]

That was however the intent of the statement: Companies that pay dividends or make share buy-backs are more vulnerable in a crisis [compared to otherwise identical companies who build a cash buffer].

I disagree that companies that pay a dividend by definition have a buffer. If the income plummets (like in non-essential retail at the moment), they have no hypothetical dividend buffer to fall back on, that if not paid out would keep them in business.

[NovemberWhiskey]

> That was however the intent of the statement: Companies that pay dividends or make share buy-backs are more vulnerable in a crisis [compared to otherwise identical companies who build a cash buffer].

That's a false dichotomy though.

Option three is what, for example, most of the profitable/zero-dividend tech firms do - which is to reinvest to boost market share, perform research and development and enter new businesses instead of returning a dividend to shareholders.

No dividends; but no cash pile either. Under your theory, those companies are no better equipped to deal with a crisis.