Short sellers have really made some big changes in their bets against the key high-yield dividend stocks that had been the darling of Wall Street. Many of these stocks are members of the Dow Jones Industrial Average. Some bets are way up, while others are down. Investors have now seen what can happen to the stocks that were bought as if they were bonds now that interest rates have proven that they really can rise rapidly. Still, short sellers appear to be remaining tactical against the high dividends rather than blanketing them. The latest short interest covers the June 14 settlement date, and we have compared this to the May 31 settlement date. We also added color where appropriate.

The top dividend stocks we track the short interest in 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), Pfizer Inc. (NYSE: PFE), Procter & Gamble Co. (NYSE: PG), Reynolds American Inc. (NYSE: RAI) and Verizon Communications Inc. (NYSE: VZ).

As we have said, 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) saw yet another drop in the short interest, by 6.5% to 18.785,495, versus 20,097,219 shares short as of May 31. Altria yields about 5% again.

American Electric Power Co. Inc. (NYSE: AEP) saw an 8.3% gain in the short interest to 3.27 million shares, versus 3.02 million shares short as of May 31. The dividend yield is about 4.5%, now that shares have slid to under $45 from a peak of $51.60.

Annaly Capital Management Inc. (NYSE: NLY) previously had seen a 19% surge in the short interest, but that fell by 4.4% to 36.69 million shares as of June 14. Annaly yields about 12.6%, based on its latest dividend, and shares are down handily from the highs as investors have been selling out of high-dividend mortgage-backed securities REITs.

AT&T Inc. (NYSE: T) saw a very tiny drop of 0.6% in its short interest to 73.91 million shares in mid-June. AT&T’s dividend is 5.2%, as shares are down $4 from the recent peak. This is the highest yield of all 30 DJIA stocks.

Duke Energy Corp. (NYSE: DUK) previously had seen a massive drop of 22% in its short interest, down to 5,360,046 shares short as of May 31. The mid-June short interest rose by 8.4% to 5,812,049 shares. Duke has a dividend yield of about 4.7%, and it just raised its dividend.

General Electric Co. (NYSE: GE) is the highest yielding conglomerate, and short sellers could not decide which way to go this time around. The short interest rose by a tiny 0.6% to 83,904,978 shares, after what had been a prior 10% drop in the short interest. GE still outyields the other conglomerates with a 3.3% yield.

Kimberly-Clark Corp. (NYSE: KMB) previously had seen a 6% drop in its short interest, but that was replaced by a surge of almost 14% to 7,935,659 shares short as of mid-June. The consumer products giant’s dividend yield is about 3.4%, now that shares are down $10 from the recent highs.

Kinder Morgan Energy Partners L.P. (NYSE: KMP) previously had seen a whopping 25% gain in its short interest, but this period was just a 1% drop to 2,790,105 shares (units) short. Its dividend is actually a distribution and is the equivalent of about 6.4%.

Merck & Co. Inc. (NYSE: MRK) saw a drop of more than 10% in its short interest after a huge gain previously. The short interest fell to 82,261,024 shares as of mid-June, versus 93,101,555 shares as of May 31. Merck’s dividend yield is 3.7%.

The number of shares sold short in Pfizer Inc. (NYSE: PFE) totaled 218,266,083 shares this period. This was a surge of 155% from the 85,357,440 shares short at the end of May. Pfizer has a yield of 3.4%.

Procter & Gamble Co. (NYSE: PG) saw a big drop in its short interest of 12.5%, down to 19,790,665 shares in mid-June, versus 22,627,279 shares at the end of May. P&G’s dividend is 3.1%, as shares are still down more than $5 from recent highs.

Reynolds American Inc. (NYSE: RAI) had previously seen an 8.5% gain in the short interest, but the mid-June short interest gave most of its back with a 7.2% drop down to 10,405,705 shares. Reynolds has a yield of about 5.3%.

Verizon Communications Inc. (NYSE: VZ) posted a 7.3% drop in its short interest to yet another post-February low in the short interest at 45.283 million shares. Verizon’s dividend yield is currently about 4.2% now that shares are down almost $4 from its 52-week high.

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