(Having trouble with the video? Click here!)
With so much cash on the balance sheet it seems these days you're always hearing about more buybacks or an increased dividend.
But if you're looking to put money to work, which is better?
"Companies have become enamored of buybacks as a way to return money to existing shareholders," said Cramer.
Sixty companies in the S&P 500 announced share buyback programs worth at least $1 billion in 2012. Within the group, the biggest buying back came from Johnson & Johnson, repurchasing $12.9 billion worth of stock.
And although a buyback can drive shares higher, as a strategy Cramer doesn't love it.
If you're a buy and hold retail investor, Cramer feels a buyback could go against you. That's because a buyback gives pros a reason to sell.