If you as a shareholder receive a dividend of X% of the share price, you owe tax on it. But if the company buys back stock and as a result the share price increases by X%, you do not owe tax on that unrealized gain until you choose to sell your stock. That’s good for investors.

Also, dividends are taxed as ordinary income whereas stock buybacks lead to capital gains, which almost always have a lower tax rate.

Qualified dividends are taxed at the same rate as long term capital gains, although the rules for what qualifies can be tricky (special one-time dividends in particular).

Only if youve held the stock for less than 6 months. Most dividends are taxed at capital gains rate.

but there is no guarantee of a stock buyback increasing the stock price by x%, correct?

They are doing a dividend too.

MSFT pays dividends.