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Shares shorted is a clear indicator for the market’s sentiment on a stock. As a stock becomes more shorted, the market is becoming more bearish on its outlook. Conversely, fewer shares shorted is a bullish development.

We ran a screen on dividend stocks paying yields above 3% and sustainable payout ratios below 50%. We screened these stocks for those with significant decreases in shares shorted month-over-month, indicating a bullish change in outlook.

Interactive Chart: Press Play to compare changes in analyst ratings over the last two years for the top six 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.

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Do you agree with short sellers that these stocks are poised to move higher? Use this list as a starting point for your own analysis.

List sorted by decrease in shares shorted.

1. Provident Financial Services, Inc. (NYSE:PFS): Operates as the holding company for The Provident Bank that provides banking services to individuals, families, and businesses in New Jersey. Market cap of $752.12M. Dividend yield at 3.86%, payout ratio at 48.01%. Shares shorted have decreased from 4.00M to 2.64M month-over-month, a change representing 2.47% of the company's 55.08M share float. The stock has lost 6.33% over the last year.

2. S&T Bancorp Inc. (NASDAQ:STBA): Operates as the holding company for the S&T Bank, which provides community banking services in Pennsylvania. Market cap of $509.92M. Dividend yield at 3.31%, payout ratio at 43.06%. Shares shorted have decreased from 2.87M to 2.22M month-over-month, a change representing 2.46% of the company's 26.42M share float. The stock has lost 6.83% over the last year.

3. Whirlpool Corp. (NYSE:WHR): Engages in the manufacture and marketing of home appliances worldwide. Market cap of $3.96B. Dividend yield at 3.86%, payout ratio at 39.71%. Shares shorted have decreased from 8.97M to 7.73M month-over-month, a change representing 1.63% of the company's 75.98M share float. The stock has lost 28.88% over the last year.

4. Destination Maternity Corporation (NASDAQ:DEST): Engages in the design and retail of maternity apparel. Market cap of $205.07M. Dividend yield at 4.74%, payout ratio at 28.01%. Shares shorted have decreased from 718.94K to 563.97K month-over-month, a change representing 1.58% of the company's 9.81M share float. The stock has lost 9.09% over the last year.

5. American Greetings Corp. (NYSE:AM-OLD): Engages in the design, manufacture, and sale of greeting cards and other social expression products worldwide. Market cap of $650.37M. Dividend yield at 3.68%, payout ratio at 24.67%. Shares shorted have decreased from 7.32M to 6.84M month-over-month, a change representing 1.32% of the company's 36.25M share float. Might be undervalued at current levels, with a PEG ratio at 0.71, and P/FCF ratio at 11.84. The stock has had a couple of great days, gaining 6.75% over the last week.

6. NYSE Euronext, Inc. (NYSE:NYX): Operates securities exchanges. Market cap of $7.01B. Dividend yield at 4.48%, payout ratio at 48.77%. Shares shorted have decreased from 9.81M to 6.51M month-over-month, a change representing 1.26% of the company's 261.40M share float. The stock has lost 1.8% over the last year.

7. Sinclair Broadcast Group Inc. (NASDAQ:SBGI): Provides certain programming, operating, or sales services to television stations in the United States. Market cap of $774.79M. Dividend yield at 5.02%, payout ratio at 46.76%. Shares shorted have decreased from 3.64M to 3.10M month-over-month, a change representing 1.06% of the company's 50.84M share float. The stock is a short squeeze candidate, with a short float at 6.07% (equivalent to 5.22 days of average volume). The stock has gained 26.75% over the last year.

8. H&R Block, Inc. (NYSE:HRB): Provides tax preparation, retail banking, and various business advisory and consulting services. Market cap of $4.74B. Dividend yield at 3.87%, payout ratio at 49.41%. Shares shorted have decreased from 19.66M to 16.68M month-over-month, a change representing 1.05% of the company's 285.09M share float. The stock has gained 30.69% over the last year.

9. Steelcase Inc. (NYSE:SCS): Designs, manufactures, and distributes furniture systems and seating products, user-centered technologies, and interior architectural products primarily in North America, Europe, and Asia. Market cap of $948.94M. Dividend yield at 3.29%, payout ratio at 36.32%. Shares shorted have decreased from 4.35M to 3.48M month-over-month, a change representing 1.02% of the company's 85.24M share float. The stock has lost 18.73% over the last year.

*Short data sourced from Yahoo! Finance, all other data sourced from Finviz.

Source: 9 High Yield Dividend Stocks With Bullish Short Trends