Shorts betting against dividend payers

Th bloggers over at 24/7 Wall Street just posted a piece stating that short-sellers are targeting stocks with high dividend yields, found here. I thought I would put some visual aid to this and see if a handful of names translates to a population as a whole. Well, it does appear that way.

The chart above shows the percentage of shares sold short as percentage of shares outstanding for S&P 500 companies with dividend yields greater than 3% (High Div) and dividend yields less than 0.5% (low Div). What this chart shows is that over the last year the average shares sold short for low-yielding stocks has remained within a range of 4.5% to 5% of total shares outstanding. In contrast, the short shares as percentage of outstanding shares for high yielders has steadily increased since January 2012, rising from about 3.5% on average to just below 4.5%. This suggests that short-sellers are increasingly targeting high-yielding stocks. We will not know any of exact reasons why short-sellers are increasingly targeting these companies, but one reason could be the imposing fiscal cliff and the impending end of the Bush-era tax regime.