Analysts are barely bullish on the stock after the run up, giving shares a 2.7 rating on a 1-to-5 scale (1 is strong buy, 5 is strong sell). As consumers find their credit lines come in and spending continues to drop, it's pretty hard to estimate what the eventual upside will be for the names like Family Dollar that play directly into this trend.

Suffice it to say that, in all likelihood, analyst models of the stock may be undershooting the capacity of strapped consumers to opt for sawbuck bargains.

Hedge funds have loved this stock and have been loathe to part with the shares as the rest of their portfolios have been redeemed into oblivion. The company recently raised its dividend by 8%, a move that is either bold or brash, depending on what the future holds. At the very least, company management appears pretty bullish on the future and the company's ability to keep ponying up to shareholders.The company has strongly outperformed its peers Wal-Mart (NYSE: WMT) and Dollar Tree (NASDAQ: DLTR) over the past year.

The risk reward for buying into Family Dollar at these lofty heights is not so great but these defensive stocks probably have more of a floor than most other sectors, and the dividend at Family Dollar will remove much of the pain of a share decline. Buy high is always a bad strategy unless you have nothing else to buy, you want to hold, and you want a dividend.

Alex Salkever is the Director of Research at Piqqem.com, a stock prediction community built on user sentiment and the Wisdom of Crowds.