Short sellers could have cleaned up by betting against the high dividend stocks in May and into June. Investors got a whiff of what rising interest rates might mean to their premium dividend stocks, and they have already lightened up on the exposure there. What is interesting is that while the short interest saw some significant gains in some stocks, the short sellers did not increase their conviction in many of the go-to high dividend stocks.

The latest short interest covers the May 31 settlement date, versus the May 15 settlement date. It still seems as though short sellers have decided to remain tactical or at least more cautious rather than blanketing the high dividends.

The top dividend stocks we are tracking in the short interest are as follows: 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. We compared the short interest settlement dates of April 30 versus April 15 and gave added color compared to the recent past on each.

Altria Group Inc. (NYSE: MO) saw yet another drop in the short interest, but only 1.4%. The May 31 short interest was 20,097,219 shares, versus 20,381,393 shares as of May 15. This is down from 26.08 million recently. Altria yields 4.9%.

American Electric Power Co. Inc. (NYSE: AEP) lost another 10% of its short interest, down to 3,021,422 shares as of May 31 from 3,374,517 shares at the May 15 settlement. This had lost almost 25% of its short interest in the prior report. The dividend yield is now about 4.1%.

Annaly Capital Management Inc. (NYSE: NLY) saw a significant gain in the short interest again. The May 31 short interest rose by 19% to 38,380,737 shares, versus 32,256,344 shares as of May 15. The prior report had jumped big as well, from 25.6 million shares short at the end of April, and we have another high in the 2013 short interest for Annaly. This one yields about 13.3%, according to the screens, now that shares have sold off so much.

AT&T Inc. (NYSE: T) had previously recaptured its high short interest reading with 81.545 million shares in the mid-May short interest. This actually fell by 8.8% to 74,392,240 shares short as of May 31. AT&T’s dividend is 5.1% for the telecom giant now that shares are so far off the 52-week high.

Duke Energy Corp. (NYSE: DUK) saw a massive drop of 22% in its short interest, down to 5,360,046 shares short as of May 31. This is surprising, considering the sector pressure. Duke has a dividend yield of about 4.5%.

General Electric Co. (NYSE: GE) saw a drop of almost 10% in the short interest with the May 31 reading, at 83,372,610 shares versus 92,317,887 shares as of May 15. GE still outyields the other conglomerates with a 3.2% yield.

Kimberly-Clark Corp. (NYSE: KMB) saw a drop of almost 6% in the short interest to 6.966 million shares as of May 31. The consumer products giant’s dividend yield is about 3.3%.

Kinder Morgan Energy Partners L.P. (NYSE: KMP) still sounds like it has a low short interest, but the short interest rose by a sharp 25% to 2,818,777 units as of May 31, versus 2,248,255 units as of May 15. Its dividend is actually a distribution and is the equivalent of about 6.1%, now that shares (units) are 10% off their 52-week high.

Merck & Co. Inc. (NYSE: MRK) is one we skipped this time due to what may be a posting error at NYSE. This appeared to be an exponential gain, and Pfizer Inc. (NYSE: PFE) was up 50%, according to NYSE posting data. Merck’s dividend yield is 3.6% and Pfizer’s yield is 3.0%.

Procter & Gamble Co. (NYSE: PG) saw only a 1% drop in the May 31 short interest to 22,627,279 shares. P&G’s dividend is now back up to 3.1% since its stock backed off of highs.

Reynolds American Inc. (NYSE: RAI) saw an 8.5% gain in the short interest to 11,208,671 shares as of May 31. Reynolds has a yield about 5.3%.

Verizon Communications Inc. (NYSE: VZ) was at yet another post-February low in the short interest, down to 48,830,204 shares as of May 31, versus 50.822 million shares as of May 15. Verizon’s dividend yield is currently about 4.1%.

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