In this article, we will take a look at dividend stocks targeted by short sellers.
Short sellers — investors who profit from falling stock prices —are seeing a surge in success in 2025. They gained $159 billion in paper profits over just six trading sessions as escalating trade tensions triggered a drop of more than 10% in the US stock market. The sharp market decline, the steepest since 2022, followed President Donald Trump’s announcement of broad global tariffs. According to S3 Partners LLC, the most lucrative short position during this period was against the SPY ETF, which tracks the S&P Index. Traders betting against this fund have racked up over $6.1 billion in paper gains so far this month, based on an April 8 report from S3.
Short sellers could profit from the sharp intraday market swings that wiped out trillions in value, though their actual gains will depend on when they close their positions. S3 data showed that another $46 billion in new short bets were added in April, raising the risk that these bearish positions could intensify the market’s next major move, particularly if the current downturn reverses and pushes major indexes higher. Ihor Dusaniwsky, managing director of predictive analytics at S3, made the following comment:
“Overall, the short side was an extraordinarily profitable trade up and down the market during this correction. 81% of every short trade was profitable and 97% of every dollar shorted was a profitable trade.”
Another report from S&P Dow Jones Indices noted that the average short interest in US stocks rose to 87 basis points over the past month. The biggest jumps were observed in the Automobiles sector, which climbed by 11 basis points, followed by a 10 basis-point increase in the Commercial and Professional Services sector, and a 9 basis-point rise in the Food and Beverage sector.
Although dividend-paying stocks are generally considered more stable than growth stocks, they have still been subject to short selling throughout history. In their 1998 study Who Trades Around the Ex-Dividend Day?, Jennifer Lynch Koski and John T. Scruggs found unusual trading patterns leading up to the ex-dividend date. They suggested that security dealers might short a stock while it still includes the dividend and then repurchase it after the ex-dividend date if they expect the stock’s price drop to be larger than the dividend amount.
Similarly, in their research paper Tax-Induced Trading Around Ex-Dividend Days, Josef Lakonishok and Theo Vermaelen observed unusual levels of short selling on and shortly after the ex-dividend date. They found that this activity tends to be more pronounced in stocks offering higher dividend yields. Their findings suggest that short sellers aim to minimize the typical price drop that often follows the ex-dividend date. Given this, we will take a look at some dividend stocks that are targeted by short sellers in the current market environment.
Image by Steve Buissinne from Pixabay
Our Methodology
For this article, we screened for dividend stocks with more than 3% of their float sold short, using data from Yahoo Finance recorded on April 15. From that group, we picked stocks with dividend yields above 3%, as of April 28. Companies offering high dividend yields are often more likely to attract the attention of short sellers. The stocks are ranked in ascending order of their short % of float.
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25. VICI Properties Inc. (NYSE:VICI)
Short % of Float as of April 15: 3.03%
Dividend Yield as of April 28: 5.40%
VICI Properties Inc. (NYSE:VICI) is an American real estate investment trust company that invests in casinos and entertainment properties. The stock is often targeted by short sellers, largely because of its high dividend yield, significant dependence on the gaming sector, and sensitivity to changes in interest rates. Although its strong ties to the gaming industry could seem like a risk, casinos have generally proven to be resilient even in tough economic times. The company further strengthens its position by locking in tenants with long-term leases, while the strict regulations governing the gaming industry make it difficult for tenants to move elsewhere, providing additional stability.
This strategy has allowed VICI Properties Inc. (NYSE:VICI) to achieve full occupancy since its 2018 IPO, even through challenges such as the COVID-19 pandemic, which heavily affected the travel, hospitality, and casino industries. In addition, many of VICI’s leases are tied to the consumer price index (CPI), enabling rental increases that help offset inflation. Since the start of 2025, the stock has surged by over 11%.
In the latest quarter, VICI Properties Inc. (NYSE:VICI) showcased a strong financial position, finishing fiscal 2024 with $524.6 million in cash. The company also returned $456.7 million to shareholders through dividends during the fourth quarter. Since establishing its dividend policy in 2018, VICI has consistently raised its dividend each year. The company offers a quarterly dividend of $$0.4325 per share and has a dividend yield of 5.4%, as of April 28.
24. Ally Financial Inc. (NYSE:ALLY)
Short % of Float as of April 15: 4.16%
Dividend Yield as of April 28: 3.62%
Ally Financial Inc. (NYSE:ALLY) is a Michigan-based bank holding company that primarily focuses on auto lending. The company has clearly established strong expertise in auto lending. However, this also creates concentration risk, since retail auto loans make up more than half of its total loan portfolio. Given that new car sales tend to be highly cyclical, any negative factors, such as an economic slowdown or prolonged inflation, could pose significant challenges for the company. The stock is down by nearly 7% since the start of 2025. It is among the dividend stocks targeted by short sellers.
In the first quarter of 2025, Ally Financial Inc. (NYSE:ALLY) reported revenue of $1.54 billion, down 22.4% from the same period last year. The revenue also missed analysts’ estimates by $429.4 million. The company reported $10.2 billion in consumer auto origination volume, sourced from a record 3.8 million auto loan applications. It achieved a retail auto originated yield of 9.80%, with 44% of the volume coming from borrowers in the highest credit quality tier. Additionally, Ally marked its 64th consecutive quarter of retail deposit customer growth, adding 58,000 new customers in the first quarter and bringing its total retail deposit base to 3.3 million.
Ally Financial Inc. (NYSE:ALLY) ended the quarter with $9.5 billion available in cash and cash equivalents. The company is a strong dividend payer, having maintained its payouts consistently since 2016. Currently, it offers a quarterly dividend of $0.30 per share and has a dividend yield of 3.62%, as of April 28.
23. Ford Motor Company (NYSE:F)
Short % of Float as of April 15: 4.59%
Dividend Yield as of April 28: 5.99%
Ford Motor Company (NYSE:F) is an American multinational automobile manufacturer, headquartered in Michigan. The company sells commercial vehicles and automobiles under both its Ford and luxury Lincoln brands. According to analysts, the global automotive industry has reached a point of maturity, leaving little room for significant growth. Ford, in particular, isn’t expected to see a major increase in its revenue. In its key market, the United States, vehicle sales totaled 18.2 million in March on a seasonally adjusted annual rate — a figure that has barely changed over the past couple of decades. This stagnant trend doesn’t offer much for investors to get excited about.
Another challenge is the intense competition. Consumers today have an abundance of options when it comes to choosing where to spend their money on a new vehicle. The stock is down by over 21% in the past 12 months. However, its quarterly earnings came in strong. In the fourth quarter of 2024, Ford Motor Company (NYSE:F) reported revenue of $48.2 billion, representing a 5% increase from the same period a year earlier. The company continued to generate strong cash flow throughout the year, ending with $15.4 billion in operating cash flow and $6.7 billion in free cash flow.
Looking ahead to 2025, Ford Motor Company (NYSE:F) expects its adjusted EBIT to land between $7.0 billion and $8.5 billion, with adjusted free cash flow forecasted between $3.5 billion and $4.5 billion. Capital spending for the year is projected to range from $8 billion to $9 billion. Currently, it pays a quarterly dividend of $0.15 per share and has a dividend yield of 5.99%, as of April 28.
