Investing

5 Most Heavily Shorted Dividend-Paying Stocks: Buy the Dip or Pass?

Camping World

After reaching a 52-week low in late April, shares of recreational vehicle retailer Camping World Holdings Inc. (NYSE: CWH) added more than 21% before the company reported earnings on May 3. An EPS miss sent the shares tumbling by 10%. Over the past 12 months, the shares have lost about 36%. As of Wednesday’s close, Fintel reported that just over 46% of the company’s floated shares are short.

Recognizing that investors were unlikely to be impressed, the company raised its annual dividend by 25%. The big question for Camping World is whether sales will continue to improve if consumers start holding onto their cash. Full-year sales are expected to increase by less than 1%, and an EPS decline of about 26.5% in anticipated.

Free cash flow was negative $279.3 million over the past four quarters ($6.70 per share), and the dividend hike is not going to fix that. The stock’s 52-week range is $24.58 to $46.77. Camping World’s annual dividend is $2.50, for a yield of 6.01% and a payout ratio 23.2%. The average daily trading volume is around 1.7 million shares.

Guess

Another specialty retailer, Guess? Inc. (NYSE: GES), is expected to report first-quarter 2023 results early in June. Year-over-year comparisons suggest higher revenue and EPS. Sequential comparisons are not as encouraging, mainly because the fourth quarter that ended in January reflected holiday season business. For the full 2023 fiscal year, Guess is expected to add about 3% to revenue and almost 7% to EPS.

At Wednesday’s closing bell, 23.35% of the company’s float was sold short, somewhat lower than the year-to-date high of about 25.1% at the end of March.

Guess pays an annual dividend of $0.90, yielding 4.58%. The company’s payout ratio is 21.44%, and free cash flow for the past 12 months was $68.1 million ($1.09 per share). The average daily trading volume on the stock is around 1.1 million shares.

PetMed Express

Online pet pharmacy PetMed Express Inc. (NASDAQ: PETS) got a big sales boost from the stay-at-home rules during the pandemic. Like many companies in a variety of industries, PetMed had trouble meeting expectations given the tough comparisons. The company’s sales for the 2022 fiscal year that ended in March were down about 11.6%, and EPS fell by 31.5%. Short interest in PetMed is just over 22%.

PetMed stock has dropped about 25% over the past 12 months, and since reaching a 52-week in early June, shares have declined by around 53%. The stock reached a 52-week low on Tuesday.

PetMed pays an annual dividend of $1.20 yielding 5.73%. The company’s payout ratio is 114.56%, and its free cash flow for the past 12 months was $16.7 million ($0.83 per share). The average daily trading volume on the stock is around 400,000 shares.

Sponsored: Find a Qualified Financial Advisor

Finding a qualified financial advisor doesn’t have to be hard. SmartAsset’s free tool matches you with up to 3 fiduciary financial advisors in your area in 5 minutes. Each advisor has been vetted by SmartAsset and is held to a fiduciary standard to act in your best interests. If you’re ready to be matched with local advisors that can help you achieve your financial goals, get started now.