Short Sellers Changing Their Bets Against High-Yield Dividend Stocks (MO, AEP, NLY, T, DUK, KMB, KMP, MRK, PG, RAI, VZ)

Stock Split ImageShort sellers have made some serious changes in the high dividend stocks now that the taxes are almost certain to change in this sector. We tracked the short interest changes from November 30 settlement date versus the November 15 settlement date. We also added color if applicable.

The top dividend stocks we are tracking in the short interest are: Altria Group Inc. (NYSE: MO), American Electric Power Co. Inc. (NYSE: AEP), Annaly Capital Management Inc. (NYSE: NLY), AT&T Inc. (NYSE: T), Duke Energy Corp. (NYSE: DUK), Kimberly Clark Corp. (NYSE: KMB), Kinder Morgan Energy Partners L.P. (NYSE: KMP), Merck & Co. Inc. (NYSE: MRK), Procter & Gamble Co. (NYSE: PG), Reynolds American Inc. (NYSE: RAI) and Verizon Communications Inc. (NYSE: VZ).

Altria Group Inc. (NYSE: MO) saw another gain in the short interest to 42.06 million shares, versus 41.81 million shares short. This is the highest short interest since mid-September. Altria yields about 5.3% and shares are still down about 10% from their recent peak.

American Electric Power Co. Inc. (NYSE: AEP) saw another drop to 4.05 million shares, versus 4.44 million shares short in mid-November. This is now less than half of the short interest peak of 8.38 million shares short in mid-August. AEP yields about 4.3%, which is lower now that shares have recovered some.

Annaly Capital Management Inc. (NYSE: NLY) saw its fourth consecutive drop, down to 24.2 million shares short at the end of November, versus 26.8 million shares short in mid-November. Actually, this was the lowest short interest in all year (again)! The king of mortgage REITs has a current yield of about 13.6%.

AT&T Inc. (NYSE: T) saw another gain to 54.95 million shares, versus 52.6 million shares short in mid-November. AT&T yields 5.3%.

Duke Energy Corp. (NYSE: DUK) saw a drop in the short interest at the end of November, but that was after a huge gain a month ago. The new short interest of 6.904 million shares is down from 7.433 million shares in mid-November. Its yield is about 4.8% now that its stock is down about 10% from its 52-week high.

Kimberly Clark Corp. (NYSE: KMB) saw a double-digit gain to 8.07 million shares at the end of November, versus 7.29 million shares in mid-November. It yields 3.5%.

Kinder Morgan Energy Partners L.P. (NYSE: KMP) saw its short interest drop substantially to 3.32 million shares at the end of November, versus 4.295 million shares short in mid-November. This is the lowest reading since the end of July. Its distribution rate, a yield-equivalent (before tax implications), is listed as 6.3%.

Merck & Co. Inc. (NYSE: MRK) saw a drop in the short interest in the wake of its dividend hike. The short interest at the November 30 settlement date was 23.75 million shares, versus 25.54 million shares short in mid-November. Its dividend yield is now close to 4%.

Procter & Gamble Co. (NYSE: PG) saw its short interest rise about 5% to 21.43 million shares short at the end of November, versus 20.36 million shares short in mid-November. P&G's dividend is about 3.1% now that shares are back above $70.

Reynolds American Inc. (NYSE: RAI) saw its fifth consecutive rise in the short interest to 9.584 million shares short at the end of November. This is the highest short interest since May. This one yields about 5.5%.

Verizon Communications Inc. (NYSE: VZ) saw a 5.5% drop in the short interest to 45.02 million shares at the end of November, versus 47.65 million in mid-November. The telecom giant yields about 4.7%.

As a reminder, it takes a lot more conviction to short a stock that has a very high dividend. On top of having to pay a broker loan-call rate to borrow the stock, the dividend payouts and the ex-dates play into the equation as well.

JON C. OGG


Filed under: 24/7 Wall St. Wire, Active Trader, Defensive Stocks, Dividends & Buybacks, Short Interest Tagged: AEP, DUK, KMB, KMP, MO, MRK, NLY, PG, RAI, T, VZ

Increase your money and finance knowledge from home

Forex for Beginners

Learn about trading currencies and foreign exchange transactions

View Course »

Professional Vs Do it Yourself Investing

Should you get advice or DYI?

View Course »

Add a Comment

*0 / 3000 Character Maximum