Buybacks have been helped as well by Fed policy.
The Fed has pushed its balance sheet to about $4.2 trillion as it has created money to use for purchasing government debt. In turn, the central bank has kept interest rates at record lows—its own policy rate is just above zero—allowing companies to rack up cheap debt and accrue nearly $2 trillion in cash, another record achieved in the fourth quarter of 2013.
The top 50 companies hold about half that total cash pile, with Apple, Microsoft, Google, Verizon and Pfizer alone banking $404 billion, according to Moody's.
"Equities are cyclical and earnings are cyclical, so payout ratios are cyclical. The question is where we are in the cycle. We're sort of in the middle of the cycle in general," Deutsche Bank's Chadha said. "Our take is the cycle has much further to run. Cycles always end with the Fed, and the Fed hasn't started yet" to tighten policy.
True, the Fed has begun to reduce the amount of liquidity it provides to the market each month, taking its purchases down to a still-hefty $55 billion as it looks to unwind the program completely by the end of the year.
But interest rate hikes likely wouldn't come until mid-2015—plenty of time for corporations to keep using cheap money to buy back their stocks.
If there's a stumbling block ahead, the main problem will come from retail investors and portfolio managers, who have been singing a different tune than Icahn and his hedge fund brethren.
They want to see companies start to invest in capital expenditures and hiring—in other words, growth that would promote a more even economic recovery and focus on something other than boosting equity prices.
(Read MoreIcahn, BlackRock's Fink trade words on spending)
"On a short-term basis, buybacks are a win-win situation," said Howard Silverblatt, senior index analyst at S&P Dow Jones Indices. "Longer term, that's a different story." Silverblatt also believes the trend is significantly higher for buybacks and probably only a bit higher for capital expenditures with little of that money spent on things that would boost employment.
Wall Street economists are enthusiastic that capex will pick up this year, though Moody's said on an annualized basis it expects "incremental" gains.
Another issue: As the market keeps ripping higher, stocks could start getting too pricey and cause companies to wait for the long-anticipated correction before stepping in.
"Maybe a lot of insiders are concluding that stocks aren't a screaming buy, or managers think their stocks are not undervalued," said Brian Gendreau, chief market strategist at Cetera Investment Management. "Because stock prices are appreciating and basically have gone up faster than earnings, a pullback of some sort is highly likely."