2 High-Yield Short Squeeze Candidates

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Includes: CBL, PBI
by: Kapitall

Here we offer a very interesting way to look for attractive income investments – by searching for short squeeze candidates that have enough operating cash flow and levered free cash flow to cover their high-yield dividends.

We began this search by screening for high-yield stocks (between 4-7%) that were also short squeeze candidates, with short float above 10%.

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From this universe, we then searched for those stocks with enough TTM operating cash flow and TTM levered free cash flow to cover their annual dividend.

Do you think these dividends are sustainable? Use this list as a starting-off point for your own analysis.

1. CBL & Associates Properties Inc. (NYSE:CBL): REIT Industry. Market cap of $2.77B. Short float at 12.31%, equivalent to 11.12 days of average volume. Dividend yield at 4.50%, with a payout ratio of 423.19%. This is a risky stock that is significantly more volatile than the overall market (beta = 3.29). The stock has gained 30.38% over the last year.

TTM Operating Cash Flow at $420.20M, which translates into operating cash flow per share at $2.83 per share (vs. annual dividend per share at $0.84, which means that TTM Operating Cash Flow per share / annual dividend per share stands at 3.37).

TTM Levered Free Cash Flow at $404.82M, which translates into levered free cash flow per share at $2.73 per share (vs. annual dividend per share at $0.84, which means that TTM Levered Free Cash Flow per share / dividend per share stands at 3.25).

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2. Pitney Bowes Inc. (NYSE:PBI): Business Equipment Industry. Market cap of $4.98B. Short float at 10.14%, equivalent to 9.17 days of average volume. Dividend yield at 6.00%, with a payout ratio of 94.74%.

TTM Operating Cash Flow at $947.32M, which translates into operating cash flow per share at $4.65 per share (vs. annual dividend per share at $1.48, which means that TTM Operating Cash Flow per share / annual dividend per share stands at 3.14).

TTM Levered Free Cash Flow at $817.07M, which translates into levered free cash flow per share at $4.01 per share (vs. annual dividend per share at $1.48, which means that TTM Levered Free Cash Flow per share / dividend per share stands at 2.71).


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*Dividend yield and payout ratio sourced from Reuters, operating cash flow, levered free cash flow, and dividend per share sourced from Yahoo! Finance, 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.