The Dividend Daily

American Water Works (AWK) reported third quarter revenues of $680.0 million, a 1.2 percent increase of $7.8 million over the same period in 2008. Net income in the third quarter was $91.6 million, or $0.52 per basic and diluted common share, compared with $88.2 million or $0.55 per basic and diluted common share in the third quarter of 2008.

Management cited the results (missed analyst estimates by 2 cents) were impacted by one of the wetter summers experienced by much of the country. Total volume of water sold decreased 7.4 percent for the quarter ended September 30, 2009, or 9.1 billion gallons from the same period in 2008.

The Bottom Line
We have avoided shares of AWK since our early June coverage began last year, when the stock was trading at $22. The company has a 4.29% dividend yield, based on Friday’s closing stock price of $19.56. The stock has technical support in the $17 price area. If the shares can firm up, we see overhead resistance around the $22 price level. We would remain on the sidelines for now.

American Water Works (AWK) is not recommended at this time, holding a Dividend.com DARS™ Rating of 3.3 out of 5 stars.

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