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One helpful indicator for the sentiment surrounding a stock is short selling – when there are fewer shares shorted, the market is generally more bullish about a stock, and vice-versa.

We wanted to screen dividend stocks (paying dividend yields above 2% and sustainable payout ratios below 35%) for those that are seeing rapid dividend growth, comparing the trailing-twelve-month dividend per share to the current year dividend per share estimate.

Interactive Chart: Press Play to compare changes in analyst ratings over the last two years for the stocks mentioned below. Analyst ratings sourced from Zacks Investment Research.



We also created a price-weighted index of the stocks mentioned below, and monitored the performance of the list relative to the S&P 500 index over the last month. To access a complete analysis of this list's recent performance, click here.



Do you think these stocks will continue to raise their dividends? Use this list as a starting point for your own analysis.

List sorted by decrease in share shorted as a percent of share float.

1. OneBeacon Insurance Group, Ltd. (NYSE:OB): Surety and Title Insurance Industry. Market cap of $1.23B. Dividend yield at 6.48%, payout ratio at 11.91%. Current year dividend per share estimate at $1.53 vs. TTM dividend per share at $0.84. Shares shorted have decreased from 843.62K to 1.44M, a change representing 2.75% of the company's share float. The stock is a short squeeze candidate, with a short float at 6.53% (equivalent to 11.29 days of average volume). The stock has gained 7.62% over the last year.

2. Kinder Morgan, Inc. (NYSE:KMI):
Oil and Gas Pipelines Industry. Market cap of $19.44B. Dividend yield at 4.38%, payout ratio at 13.51%. Current year dividend per share estimate at $1.15 vs. TTM dividend per share at $0.44. Shares shorted have decreased from 12.13M to 13.04M, a change representing 1.80% of the company's share float. The stock is a short squeeze candidate, with a short float at 87.09% (equivalent to 8.43 days of average volume).

3. MKS Instruments Inc. (NASDAQ:MKSI):
Diversified Machinery Industry. Market cap of $1.37B. Dividend yield at 2.30%, payout ratio at 10.63%. Current year dividend per share estimate at $0.60 vs. TTM dividend per share at $0.30. Shares shorted have decreased from 2.01M to 2.18M, a change representing 0.33% of the company's share float. The stock has gained 22.15% over the last year.

4. Innophos Holdings Inc (NASDAQ:IPHS): Chemicals Industry. Market cap of $1.08B. Dividend yield at 2.02%, payout ratio at 27.53%. Current year dividend per share estimate at $1.00 vs. TTM dividend per share at $0.76. Shares shorted have decreased from 650.80K to 720.37K, a change representing 0.33% of the company's share float. The stock has gained 73.71% over the last year.

5. El Paso Electric Co. (NYSE:EE): Electric Utilities Industry. Market cap of $1.40B. Dividend yield at 2.66%, payout ratio at 10.81%. Current year dividend per share estimate at $0.77 vs. TTM dividend per share at $0.22. Shares shorted have decreased from 1.83M to 1.92M, a change representing 0.22% of the company's share float. The stock has gained 52.41% over the last year.

*Dividend data sourced from Screener.co, short data sourced from Yahoo Finance, and all other data sourced from Finviz.

Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.

Source: 5 Stocks With Rapid Dividend Growth and Bullish Short Trends