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

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.