Short Sellers Make Big Changes in High-Yield Dividend Stocks

The top dividend stocks we track 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.

Altria Group Inc. (NYSE: MO) had been declining in the shares short, but a small uptick was seen here going to 17.769 million shares from 17.512 million shares. Altria yields only about 4.8% as of now, because shares are up around $37 again.

American Electric Power Co. Inc. (NYSE: AEP) had previously jumped more than 30% in its short interest, and this short interest report was up another 8% to 4,628,422 shares. AEP yields about 4.2%.

Annaly Capital Management Inc. (NYSE: NLY) is suffering with the rest of mortgage REITs, but its short interest fell more than 11% to 33,189,560 shares from 37,388,702 shares. Annaly is down sharply from its highs, but still has a double-digit dividend yield.

AT&T Inc. (NYSE: T) saw a larger gain in the short interest this time than two weeks ago, as its short interest rose by 10% to 84.7 million shares. AT&T’s dividend is 5.0% and is the highest yield of all 30 DJIA stocks.

Duke Energy Corp. (NYSE: DUK) saw its short interest rise again, but this was a gain of nearly 16% to 8.195 million shares as of July 15. Duke has a dividend yield of about 4.4%, and it just raised its dividend.

General Electric Co. (NYSE: GE) is the highest yielding conglomerate, but short sellers decided to call it a day here. The short interest as of July 15 fell by a sharp 12.4% to 74,164,427 shares. GE shares come with a dividend yield of 3.2%.

Kimberly-Clark Corp. (NYSE: KMB) added again in the short interest, but this gain was only 2.1% to 8.508 million shares as of July 15. The consumer products giant’s dividend yield is about 3.3%.

Kinder Morgan Energy Partners L.P. (NYSE: KMP) has seen a steady rise in the short interest, but this gain was sharp at 21.6% to 3.668 million units. Its dividend is actually a distribution and now is back down to the equivalent of about 6.1%.

Big Pharma short changes: Merck & Co. Inc. (NYSE: MRK) saw a gain of almost 3% to 76,200,607 shares in its July 15 short interest, versus 74,077,186 shares at the end of June. Pfizer Inc. (NYSE: PFE) saw a massive drop of literally almost 50% as the short sellers have gotten out of the way of its restructuring and spin-off. Its short interest was down 49% to 169.3 million shares. Merck has a yield of 3.6%, versus Pfizer’s yield of 3.4%.

Procter & Gamble Co. (NYSE: PG) saw only a drop of 1.5% in its July 15 short interest to 21,997,523 shares. P&G’s dividend is down to 3% now that shares have recovered to above $80.

Reynolds American Inc. (NYSE: RAI) saw a drop of only 1% in the short interest down to 9,712,608 shares as of July 15. Reynolds has a yield of about 4.8% now that shares hit a new 52-week high.

Verizon Communications Inc. (NYSE: VZ) saw its short interest drop again, this time with a 3.3% drop to 46.86 million shares. Verizon’s dividend yield is currently much lower than AT&T at 4.1%.