There are several driving forces behind this move. Treasuries and bonds are becoming solely for those who just cannot take the volatility of traditional investing. The 10-year Treasury yield is a dismal 1.5%, and even the 30-year is yielding only about 2.6%. Getting more than 1% interest on a bank CD is becoming a challenge. Europe is threatening to pull down the American growth story in an election year. And all of this is happening at a time when the dividend taxes are currently set to increase substantially if no changes are made to the tax code before the end of 2012.
24/7 Wall St. has selected five possible dividend bubbles that are inflating right now. We have used Thomson Reuters for forward earnings estimates and analyst price targets. For a true bubble to exist, the stock performance had to be strong, the dividend yield had to be lower than in the recent past, the current year P/E ratio had to be above normal or above the market, and the consensus price target from analysts had to be less than the current share price.