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13 Dividend Giants with Lowest Short Interest

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In this article, we discuss 13 dividend giants with the lowest short interest. You can skip our detailed analysis of dividend stocks and their previous performance, and go directly to read 5 Dividend Giants with Lowest Short Interest

While the financial world is typically viewed as serious and analytical, the art of short selling adds a dash of excitement and complexity to the market narrative. Short interest refers to the total number of shares of a particular stock that have been sold short by investors but have not yet been covered or closed out. In a short sale, an investor borrows shares of a stock from a broker and sells them on the open market with the expectation that the stock's price will fall. The investor aims to buy back the shares at a lower price, return them to the lender, and profit from the difference. Short selling is not for the faint of heart. The potential for unlimited losses and the obligation to buy back shares at an unpredictable future price make this strategy inherently risky.

Also read: 15 Stocks with Lowest Short Interest

The success of short sellers is contingent on a multitude of factors, and it can vary across different market segments and conditions. In 2023, short sellers are making profits by betting against small-cap stocks.  Short sellers have reportedly earned paper profits of almost $13 billion in the current year by betting on a decline in the prices of small-, micro-, and nano-cap shares. This estimate, provided by S3 Partners LLC, is based on the average amount of short positions in the market. Interestingly, this contrasts sharply with the approximately $140 billion in losses resulting from short sales of mid-, mega-, and large-cap stocks. The latter category experienced a rally for a significant portion of the year, defying gloomy economic forecasts.

At the beginning of 2023, the banking sector encountered challenges, and short sellers capitalized on the upheaval. Hedge funds that bet against bank stocks amassed unrealized gains totaling $7.25 billion throughout the month, as reported by Ortex. Peter Hillerberg, the company’s co-founder further said:

“ORTEX data shows that March was the single most profitable month for short sellers in the banking sector since the 2008 financial crash.”

As mentioned before, engaging in short selling involves numerous risks. This becomes particularly true when investors attempt to short a stock that pays dividends as they may be responsible for paying any dividends that the stock distributes during the time they hold the short position. This can add cost to the short seller. Despite the risks associated with short selling, dividends have consistently captivated investors because of their potential to provide steady and reliable returns. In this article, we'll explore dividend giants that currently have minimal short interest.