University of Pennsylvania investment whiz Jeremy Siegel has been saying for weeks that Treasuries represent a bubble, especially if you buy them in a mutual fund.

So what should investors seek as an alternative?

“Given the extraordinary low interest rates on bonds, I believe that stocks with earnings that comfortably cover their dividends will be the best investment,” Siegel writes on Yahoo.

“Currently many large U.S. and international firms fit that bill. The 10 largest U.S. dividend payers — AT&T, Exxon Mobil, Chevron, Procter & Gamble, Johnson & Johnson, Verizon Communications, Phillip Morris International, Pfizer, General Electric, and Merck — sport an average dividend yield of 4 percent.”

That’s about 150 basis points higher than 10-year Treasuries yield and about three percentage points higher than the yield on 10-year Treasury Inflation Protected Securities (TIPS).

The average price-earnings ratio, based on 2010 estimated earnings, for those dividend stocks is 11.7, versus 13 for the Standard & Poor’s 500 Index as a whole, Siegel says.

“And their earnings cover their expected dividends by a ratio of more than two to one.”

Other experts share Siegel’s bullishness toward dividend stocks.

With corporate cash reserves at 25-year highs, and bond yields close to 50-year lows, "I think stocks are very attractive as yield investments compared to fixed income," John Frankola of Vista Investment Management told the Pittsburgh Post-Gazette.