Most investors are familiar with the primary way that an ASX share can return capital to its investors: by paying out dividends. But share buybacks can be just as lucrative as a dividend, and could even be preferable in some circumstances.

Even the legendary investor Warren Buffett has frequently discussed his love of share buybacks and why he favours a buyback over paying out a dividend at his company Berkshire Hathaway.

How does a share buyback work?

A share buyback is, well, all in the name. A company buys back its own shares on the open market, just as any other investor would. However, instead of holding the shares over time, as you or I might, the company retires or destroys them.

This has several consequences. Firstly, by reducing the supply of available shares, a share buyback puts upward pressure on the company's share price. That's because, under the laws of supply and demand, reduced supply leads to higher prices. So that's one win for shareholders.

Fewer shares also mean that all remaining shareholders see their actual ownership of the company rise. Say I own 10 shares of Company X, and Company X has a total of 100 shares outstanding. As such, I would own 10% of the company.

But if Company X buys back 10 shares from the open market, and retires them, there are now only 90 shares outstanding. I still own my 10 shares, but instead of a 10 % ownership, I now own 11.11%. That entitles me to more of the company's earnings and dividends as a result. And, unlike a dividend, this all happens without me having to pay any tax.

If a company makes a habit of buying back its own stock, it can have a huge impact on shareholder returns over time.

Which ASX stocks have been buying back their own shares in 2023?

So let's talk about which ASX shares have been buying back their own stock in 2023 so far.

Luckily for us, we don't have to sift through ASX notices to find out. The data has been compiled for us by S&P Market Intelligence. So here is a list of some of the ASX shares that have conducted share buybacks in 2023 to date:

• Amcor plc (ASX: AMC)
• Cochlear Limtied (ASX: COH)
• Qantas Airways Limited (ASX: QAN)
• Australian Foundation Investment Co Ltd (ASX: AFI)
• Eagers Automotive Ltd (ASX: APE)
• AMP Limited (ASX: AMP)
• Pinnacle Investment Management Group Ltd (ASX: PNI)
• Objective Corporation Ltd (ASX: OCL)
• Helia Group Ltd (ASX: HLI)
• Temple & Webster Group Ltd (ASX: TPW)
• Djerriwarrh Investments Ltd (ASX: DJW)
• Estia Health Ltd (ASX: EHE)
• Kogan.com Ltd (ASX: KGN)
• OFX Group Ltd (ASX: OFX)
• Mayne Pharma Group Ltd (ASX: MYX)
• AMCIL Limited (ASX: AMH)
• Garda Diversified Property Fund (ASX: GDF)
• US Masters Residential Property Fund (ASX: URF)
• Cogstate Limited (ASX: CGS)

Many of these shares, including Qantas, Cochlear, Eagers Automotive, and Kogan, have had exceptionally strong share price growth this year so far. And from what we know about buybacks, there's little doubt that these were at least partially assisted by the companies' actions in buying back their own stock.

The post Returning capital: These ASX companies have been buying back their shares in 2023 appeared first on The Motley Fool Australia.

Dixon Advisory and Superannuation Services Limited faces allegations of not acting in its clients' best interests and providing inappropriate advice.

The Australian Securities and Investments Commission (ASIC) also accuses Dixon Advisory of not dealing with a conflict of interest between its clients' and businesses within Evans Dixon.

The specific allegations refer to 51 instances of advice provided to 8 clients relating to investment in US Masters Residential Property Fund Unit (ASX: URF).

According to ASIC, URF was created by Dixon Advisory back in 2011 and paid "substantial fees" to companies within Evans Dixon – including Dixon Advisory itself.

A total of 126 contraventions are alleged to have occurred between 2 September 2015 and 31 May 2019.

The maximum civil penalty is $1 million for each breach before 13 March 2019, and $10.5 million per contravention after that point.

Evans Dixon, in a statement to the ASX on Friday, indicated it would mount a defence. 

"[Dixon Advisory] will be defending the proceedings and in due course will file a comprehensive defence after it has received and had a reasonable opportunity to review ASIC's detailed statement of claim," announced the company.

ASIC is also seeking a court order that Dixon Advisory put systems in place to meet clients' best interests in the future.

URF is an ASX-listed real estate investment trust (REIT) that allows shareholders exposure to the New York City residential property market.

Evans Dixon is a financial services conglomerate that provides personal wealth advice to 9,200 clients, representing $20.1 billion in investments. The company also advises institutional customers.

Evans Dixon shares were down more than 15% at 12.14 pm AEST to 45 cents. The Evans Dixon share price was $1.60 in May last year.  

The post ASIC sues ASX company for more than $100 million appeared first on The Motley Fool Australia.