Short sellers have increased their bets against some of the defensive high-yield dividend stocks, while paring down in others. As you will see, the dividend and stock performance matter here. We evaluated the April 15 short interest versus that of March 28 in these top stocks with high-yield dividends that attract value investors and income investors alike.
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), General Electric Co. (NYSE: GE), 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).
As we have said before, it takes much more conviction to short sell 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 have to be paid and the ex-dividend dates play into the equation as well.
Altria Group Inc. (NYSE: MO) ticked way back up and gave back all the losses in the short interest from the prior report. This was 26.08 million shares as of April 15, up from 23.829 million in the prior report and up from 24.55 million shares short the month before that. This was the highest reading since the end of December. Altria’s dividend yield is now 4.95%.
American Electric Power Co. Inc. (NYSE: AEP) saw short sellers back off into the stock’s strength. This fell to 3.86 million shares in the April 15 short interest. March 28 short interest was down to 4.37 million share,s versus 5.18 million as of mid-March. AEP yields 3.7% as shares have risen and risen.
Annaly Capital Management Inc. (NYSE: NLY) saw a real drop as short sellers wanted to avoid paying that dividend. The April 15 short interest fell to 26.04 million shares, versus 29.85 million shares in the previous period and from 29.37 million shares before that. What is interesting is that the days to cover rose to 3.61 from 2.62 in the prior report. Annaly has a current yield of about 11.49%, based on its last payout.
AT&T Inc. (NYSE: T) saw a slight downtick to 78.29 million shares short as of April 15, versus March 28’s count of 81.68 million shares short. AT&T’s dividend is 4.86% after the earnings drop.
Duke Energy Corp. (NYSE: DUK) saw a significant decline to 6.85 million shares in the short interest from 7.8 million in the prior report. This was the lowest reading since October, and even the days to cover fell to 2.43 from 3.48. Duke has a dividend yield of about 4.1%, as shares are higher from the last report.
General Electric Co. (NYSE: GE) has seen some serious profit taking and new bets come against after earnings, but that was after the short interest date cutoff. The short interest actually did rise ahead of earnings to 82.69 million shares, versus 78.92 million shares in the prior report. The days to cover ticked up a bit to 2.43. GE still outyields the other conglomerates, with a 3.46% yield now that shares have taken such a hit.
Kimberly-Clark Corp. (NYSE: KMB) saw a serious increase in the bets against its massive rise. The stock has hit new high after new high, up until recent days, but the short interest jumped back up to 8.05 million shares from 6.7 million at the end of March. This consumer products giant keeps seeing the shares rise, and the yield is 3.13% now.
Kinder Morgan Energy Partners L.P. (NYSE: KMP) saw its third gain in the short interest as of April 15 to 3.728 million shares (units). The March 28 short interest was 3.357 million shares, versus 2.723 million shares short in mid-March. This is the highest short interest back to last November. Its dividend is actually a distribution and now is the equivalent of about 5.61%.
Merck & Co. Inc. (NYSE: MRK) saw a massive increase in the short interest that is larger than almost all others. This short interest in mid-April went up a whopping 33% to 28.5 million shares. The March 28 short interest was 21.33 million shares, versus 26.18 million shares short in mid-March. Note that this was the highest short interest reading since last August. Merck’s dividend yield is about 3.59% now that shares have appreciated.
Procter & Gamble Co. (NYSE: PG) saw a decent gain in the short interest, meaning that short sellers cleaned up on this week’s price drop. The April 15 short interest was 23.6 million shares, versus 21.329 million shares at the end of March and 24.744 million shares short in mid-March. P&G’s dividend is back up to 3.12%, now that shares sold off after earnings.
Reynolds American Inc. (NYSE: RAI) saw a large gain in the short interest to 10.75 million shares, versus 9.676 million shares at the end of March and a prior near-term high of 10.38 million shares in mid-March. Reynolds has a yield of about 5.13% as shares have remained resilient.
Verizon Communications Inc. (NYSE: VZ) short sellers must have known it was time to step aside into the stock strength. The April 15 short interest fell to 51.423 million shares, versus 57.637 million shares at the end of March and 60.962 million shares short in mid-March. Verizon yields only 3.98% since its shares have hit higher and higher multiyear highs.