South32 (S32) was spun out of BHP with no debt and lots of assets, in fact all of the assets that were not iron ore, copper, oil (petroleum) or coal (the so-called 4 pillars of the "new" BHP at the time), although S32 actually got around half of the coal assets as well. BHP kept what they thought were the best coal assets, the east coast of Australia coal, and S32 got the South African thermal coal, which they almost immediately set about getting rid of, and have now sold. BHP are also selling out of coal now. These spin-offs often do very well, and S32 has been no exception, due to dedicated and competent management who are concentrating 100% on these assets, unlike the BHP management when those assets were part of BHP and were regarded as second or third tier assets (or non-core assets) within BHP. S32's management have supported their best assets, investing billions to grow the capacity of many of their mines and processing plants, while selling off their weaker and more troublesome assets. What they have NOT done is spent that cash (from asset sales and revenue from existing operations) on a string of large purchases. They have been very prudent with acquisitions, having hardly made any.
This is the opposite of the old BHP and the old RIO who were on empire-building binges there for a decade or more where they were overpaying for assets at the top of the cycle and then writing off billions of dollars later. Alcan is just one example. BHP spent $880 million (so almost a billion) on failed takeover attempts - of companies that they never acquired - like the Canadian fertiliser company, Potash Corporation, in 2010 - see here - which was blocked by the Canadian Government, and was Marius Kloppers' third failed deal during his tenure at the head of BHP - see here: Failure puts Kloppers under pressure (afr.com)
One of those failed bids was for RIO and valued RIO at $165 Billion - see here - RIO has a current market cap of $32.5 billion. This bid was back in 2008 and BHP was trying to pay more than 5 times what RIO is currently trading at today - in 2021.
Anyway, South32 (S32) and the new BHP are very different now. In the absence of deals that make a lot of sense (and a lot of dollars too), they are happy to return their excess cash to shareholders, and one of the best ways to do that, is via share buybacks, as long as your share price is below your estimate of its intrinsic value. In other words, if S32's management believe that the share price should be higher based on their assessment of the value of their own company, then one of their best investments is to buy their own shares back and cancel them. This means there will be less shares on issue, so the value of the remaining shares increases. Same company, but split less ways (less shares on issue). What is annoying is when companies are clearly overvalued by the market and they continue to buy back their own shares. I don't think that is the case with S32 yet. I still hold them - in my super account, and in one other account. I think I've sold them here on SM however - I'll check in a minute - which would have been to lock in the profits from their Covid-lows. I think they are still worth more than where they are currently trading, which shows why they were one of the first companies I started buying in the March 2020 Covid-lows.
What is even more annoying is when companies actually borrow money to buy back their own shares. Doubly so if they look overvalued by the market at the time. Again, not the case with S32.
S32 have also been paying dividends and special dividends, however the extent of their dividends is somewhat limited by their franking credit balance - since their final dividend for FY18 (paid on 11-Oct-2018, 3 years and one month ago today), all of their dividends have been fully franked. Prior to that they were building up their franking credit balance, because they were spun out of BHP in 2015 with no franking credits - the franking credits remained with BHP as I understand it. But also with no debt - the debt stayed with BHP too. So they pay dividends to the extent that they can fully frank them, and they also buy back shares. In the absence of a really compelling deal to buy something that is not only highly earnings accretive but also the right commodity at the right time, I'm happy to see mining companies return their profits and excess cash to shareholders. And I say that as an S32 shareholder.
Despite never having paid dividends, I think Warren Buffett's and Charlie Munger's Berkshire Hathaway aren't too far away from paying dividends also, because they are now so big that there are very few companies they could buy that would actually move the dial much. However, they don't have a franking credits system over there, so US companies tend to buy back stock more than pay dividends. Have a look at how many billions of dollars of their own stock Berkshire Hathaway have been buying back this year - Berkshire Hathaway appears to buy back more stock | Reuters
Repurchasing stock "offers a simple way for investors to own an ever-expanding portion of exceptional businesses," Buffett wrote on Feb. 27 in his annual shareholder letter.
Hope that helps.