US companies are sitting on record levels of cash. Many are choosing to use this surplus to unlock value to shareholders by raising dividends and authorizing stock buybacks. The dividend payout ratio, which is the percentage of earnings returned to shareholders, for the S&P 500 is at the highest level since the recession with a total payout in 2012 of $310 billion. This is a 22% increase over the previous year.
Companies also repurchased $384 billion of their own stock in 2012, further boosting earnings-per-share and pushing up prices. Stock buybacks reduce supply causing the remaining shares to become proportionately more valuable. Even companies with cash trapped overseas are floating bond offerings instead of repatriating it to pass on to shareholders (see Apple). With borrowing costs at historic lows, companies would rather pay interest on new bonds than bring overseas cash home and pay taxes on it. Currently, corporations are still sitting on $1.4 trillion in cash, so there's plenty of room for this trend to continue.