Telecoms Liven Up Short Interest in Big Dividend Stocks

It has been said before, and we will say it again. It takes much more conviction to short sell a high-yield dividend stock over a low-yield or non-dividend payer because the short seller is on the hook for dividend payments around ex-dividend dates, as well as the a broker loan-call rate to borrow the stock.

Altria Group Inc. (NYSE: MO) saw a sharp rise in short interest to 16.79 million shares, a jump of 12.2% and just 0.8% of Altria’s total float. This number is roughly half the number of shares held short just four months earlier. Days to cover is two. Altria’s yield rose slightly in the two-week period to about 5.3%, since the stock has pulled back to 4.5% below its 52-week high.

AT&T Inc. (NYSE: T) saw its short interest rise 12.8% to 199.24 million shares, or about 3.8% of the stock’s float. Days to cover rose to eight. The stock closed at $34.72 Tuesday, in a 52-week range of $31.74 to $39.00. Shares were up about 0.8% in the two weeks since the last report on short interest. AT&T’s dividend yield is 5.4%.

General Electric Co. (NYSE: GE) saw short interest rise to 75.69 million shares by mid-March, up 2.7% in the two-week period. Days to cover rose to three. Shares are down about 1.5% in the two-week period. GE’s yield is back up to 3.5% as the shares are down about 6.5% year to date.

Kimberly-Clark Corp. (NYSE: KMB) saw a drop of 5.8% in short interest to 7.16 million shares. About 1.9% of the company’s float is held short, and days to cover is four. The stock’s yield is 3.1% after a dividend hike on February 25. Shares closed Tuesday night at $110.56, in a 52-week range of $91.44 to $111.71.

Merck & Co. Inc. (NYSE: MRK) saw its short interest jump 7.4% to 29.71 million shares. Days to cover is three. Back in May of last year, more than 93 million shares were held short, and more than 31 million were held short at the end of November. Merck’s yield is 3.2%. The shares traded up 3.5% in Wednesday’s premarket, at $55.66 in a 52-week range of $43.77 to $57.65.

Pfizer Inc. (NYSE: PFE), like Merck, has seen short interest drop dramatically, from a high of more than 335 million shares last June to just 54.35 million in the first half of March. For the period, Pfizer’s short interest rose 1.5% and days to cover is two. Pfizer’s yield is 3.2%.

Procter & Gamble Co. (NYSE: PG) saw a move higher to 23.36 million shares short, up 1.7% in the two-week period. About 0.9% of the company’s shares are held short and days to cover is three. For the past year, P&G’s short interest has moved around in a fairly narrow range between about 19 million and 25 million shares short. P&G’s dividend yield is 3.1%.

Verizon Communications Inc. (NYSE: VZ) saw another major dip in its short interest during the first two weeks of March. Short interest dropped 27.1% to 53.3 million shares, with just one day to cover. Short interest in Verizon fell 32% in the prior two-week period, and since the end of January, short interest has dropped by almost 50%. Verizon’s dividend yield is currently 4.5%.