Short Sellers Maintain Assault Against High-Yield Dividend Stocks (MO, AEP, NLY, T, DUK, KMB, KMP, MRK, PG, RAI, VZ)
Feb 12th 2013 1:36PM
Updated Feb 13th 2013 6:35AM
Short sellers have had their challenges due to rising share prices since the start of 2013. They have gone on to make some serious changes in the high dividend stocks now that the dividend tax issue is mostly resolved. We tracked the short interest changes from the end of January from the middle of January, a period where share prices were rising almost each and every day. 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 a gain in the short interest to 14.3 million shares versus 12.3 million shares. This is still way down from a prior peak of more than 40 million shares. Altria yields about 5.1% and shares are now down only about 5% from their 52-week peak of $36.29.
American Electric Power Co. Inc. (NYSE: AEP) saw a mild tick higher in its short interest, up to 3.68 million shares short from 3.59 million shares in mind-January. This is well under half of the short interest peak of 8.38 million shares short in mid-August. AEP yields about 4.2% and shares are now back to within about 2% of its highs.
Annaly Capital Management Inc. (NYSE: NLY) saw a jump to 41.27 million shares in the short interest from 39.4 million shares as the highest reading in months. The king of mortgage REITs has a current yield of about 12.2% and at $15.05 its stock is stuck between the 52-week range of $13.72 to $17.75.
AT&T Inc. (NYSE: T) saw another gain to 67.98 million shares versus 65.45 million shares short in mid-January. That is the highest short interest back to June. AT&T yields 5.1% and at $35.50 its 52-week range is $29.77 to $38.58.
Duke Energy Corp. (NYSE: DUK) saw a decent jump in the short interest to 9.64 million shares from 8.82 million shares in mid-January. This was the highest short interest going back to before the merger when arbitrage was involved. Duke's yield is about 4.4% and at $69.35 its 52-week range is $59.63 to $71.13.
Kimberly Clark Corp. (NYSE: KMB) has kept climbing and climbing and shares are now challenging $90 with a 3.3% dividewnd yield. Its short interest grew to 9.13 million shares from 8.35 million shares in mid-January. This is the highest reading back to July.
Kinder Morgan Energy Partners L.P. (NYSE: KMP) saw its short interest drop marginally to 3.397 million shares (units) at the end of January versus 3.52 million shares (units) short in mid-January. Its distribution rate, a yield-equivalent (before tax implications), is listed as 5.8% and MLPs are back in favor. At $87.75 its 52-week range is $74.15 to $90.60.
Merck & Co. Inc. (NYSE: MRK) remains under pressure and its $41.50 share price compares to a 52-week range of $36.91 to $48.00 with a 4.2% dividend yield. Merck's short interest fell almost 5% to 21.24 million shares as of the end of January, and that is lower than in the prior readings on average.
Procter & Gamble Co. (NYSE: PG) saw its short interest climb handily to 19.35 million shares at the end of January versus 15.56 million shares short in mid-January. P&G's dividend is about 3.0% now that shares are back above $76.00 and within 1% of a new 52-week high.
Reynolds American Inc. (NYSE: RAI) saw its short interest dip mildly to about 9.81 million shares from 9.98 million shares in mid-January. This is still considered to be an elevated short interest. This tobacco player yields about 5.3% and ist $44.00 share price compares to a 52-week range of $39.45 to $46.93.
Verizon Communications Inc. (NYSE: VZ) saw almost a 6% drop in the short interest down to 45.32 million shares at the end of January versus 48.11 million shares short in mid-January. The telecom giant yields about 4.6% and its $44.50 share price is still about 10% shy of the 52-week high of $48.77.
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.
Filed under: 24/7 Wall St. Wire, Active Trader, Dividends & Buybacks, Short Interest Tagged: AEP, DUK, KMB, KMP, MO, MRK, NLY, PG, RAI, T, VZ