Updated 4/11/25
Badger Meter might not be a household name, but if you’ve ever paid a water bill, chances are some of their technology played a part in getting that reading. This Milwaukee-based company has been in the flow measurement business for nearly a century, providing smart water solutions that help utilities manage consumption and infrastructure more efficiently. It’s a specialized niche, but one with staying power—and that’s exactly what long-term income investors tend to look for.
BMI’s footprint is growing, slowly and steadily. It’s not the kind of stock that dominates headlines, but that’s part of the appeal. It’s a low-drama performer with a rock-solid balance sheet, consistent profitability, and a history of sharing its success with shareholders through regular dividends.
Recent Events
In the past year, BMI has seen some solid momentum. The company’s most recent quarter showed a 12.5% jump in revenue compared to the same period last year. That wasn’t just top-line fluff—net income grew even faster, up over 24%. Behind those numbers is a story of operational efficiency, solid demand for its smart metering products, and a business that knows how to manage costs while expanding its footprint.
Investors have noticed. BMI’s market cap has hovered around $5.36 billion, up from $4.75 billion at the end of 2023, even after pulling back from a high of over $6 billion in Q3. That kind of market cap movement, paired with consistently growing fundamentals, tends to indicate quiet confidence from the market.
One of the more impressive parts of BMI’s story is its balance sheet. The company holds close to $300 million in cash and carries just $6 million in debt. That level of financial discipline isn’t common in today’s market, and it gives BMI plenty of options—whether it’s for acquisitions, product development, or simply maintaining its reliable dividend.
Key Dividend Metrics
💰 Forward Yield: 0.79%
📈 5-Year Average Yield: 0.74%
📆 Recent Dividend Date: March 14, 2025
📉 Payout Ratio: 28.84%
🏦 Cash on Hand: $295.3 million
⚙️ Free Cash Flow (ttm): $114.39 million
📊 EPS Growth (yoy): 24.3%
Dividend Overview
BMI isn’t throwing off massive income, but what it offers is stability. The forward dividend yield of 0.79% might seem modest, but it’s in line with what this company has historically delivered. More importantly, it’s backed by fundamentals that suggest long-term sustainability.
The payout ratio sits comfortably at 28.84%, which tells us there’s plenty of room for future hikes. Even if the company runs into a rough quarter or two, that buffer gives management the flexibility to keep the dividend flowing without stretching resources.
Cash flow is also solid. BMI generated $155 million in operating cash over the last twelve months and only needed about $40 million to cover dividend payments. That’s the kind of breathing room you want to see—enough to handle shareholder returns, fund operations, and reinvest in the business without overextending.
Dividend Growth and Safety
BMI has been quietly building its dividend profile for years. It doesn’t make flashy increases, but the growth is steady. The current yield of 0.79% is a slight step up from the trailing yield of 0.67%, reflecting both recent dividend increases and solid stock price appreciation.
There’s a lot to like about how BMI handles capital. Return on equity is up around 22%, and return on assets is close to 13%—indicators that this management team knows how to put capital to work efficiently. Combine that with almost no debt and a strong cash position, and you’ve got a business that’s built to endure.
Even with a rich valuation—trading at over 43 times trailing earnings—BMI still earns a look from dividend-focused investors who value safety and predictability. This isn’t a high-yield play, but it is a quality one. The dividend may not jump off the page, but it’s consistent, well-funded, and set up to grow with time.
Badger Meter won’t be the loudest stock in your portfolio, but it might be one of the steadiest. For investors who value companies that reward patience, BMI checks a lot of the right boxes.
Cash Flow Statement
Badger Meter’s cash flow profile over the trailing twelve months reflects strong operational momentum. Operating cash flow came in at $155 million TTM, marking a continued climb from $110 million in 2023 and just over $82 million in 2022. This steady growth points to healthy core operations and improved efficiency in turning revenue into real cash. The company’s ability to consistently convert earnings into cash strengthens the case for long-term dividend support and reinvestment.
Capital expenditures remained well-controlled at $12.8 million, and free cash flow surged to $142 million. With only modest outflows from investing activities and minimal financing costs—$35 million in net cash used, largely from dividend payments—BMI is not reliant on debt markets to fund operations. The result: cash on hand has swelled to $295 million, more than tripling since 2021. This robust cash position, paired with rising free cash flow, keeps Badger Meter in a position of strength, giving it flexibility to invest selectively while continuing to reward shareholders.
Analyst Ratings
📊 Badger Meter has recently attracted attention from analysts, leading to a mix of rating updates and revised price targets. 📝 The consensus among five analysts currently sits at a “Hold” rating. Within that group, two have leaned bullish with a “Buy” call, while three suggest holding for now. 🎯 The average 12-month price target is $225.20, which implies an upside of about 23.7% from the current share price. Targets range from a low of $203.00 to a high of $251.00, showing a decent spread in outlook based on differing views of growth potential.
🧠 What’s driving the sentiment? A few key fundamentals. Analysts are watching Badger Meter’s revenue growth, which has been consistent, and its profitability margins, which remain among the strongest in its peer group. 💼 The company’s balance sheet is also getting praise—virtually no debt and nearly $300 million in cash gives BMI a solid foundation. 💧 Add in its positioning within the smart water technology space, where demand continues to grow, and it becomes clearer why there’s cautious optimism. While not everyone is convinced to jump in with a “Buy,” there’s a shared respect for how well-run and financially disciplined this company is.
Earning Report Summary
Solid Growth Across the Board
Badger Meter closed out 2024 with the kind of performance that doesn’t need a flashy headline to make an impact. Full-year sales came in at $826.6 million, which was a clear step up from the prior year. A big part of that came from growth in utility water sales—up 14%—as more municipalities adopted their smart metering solutions. This isn’t just about selling hardware anymore. It’s a shift toward full-scale digital infrastructure, and Badger Meter seems to be riding that wave smoothly.
The software side of the business also pulled more weight this year. Software sales grew by about 30%, topping $56 million. That’s not just incremental progress—it’s evidence that customers are increasingly valuing the data and analytics Badger’s systems provide, not just the devices themselves.
Profitability and Cash Flow Moving in the Right Direction
Beyond top-line growth, margins told a strong story too. Operating margins improved by over two percentage points, hitting 19.1% for the year. That kind of margin expansion says a lot about internal discipline and scale benefits kicking in. As a result, earnings per share climbed 35%, landing at $4.23 versus $3.14 the year before.
But maybe the most impressive number of the report was cash flow. Operating cash hit a record $155 million. That’s the kind of cash generation that gives a business real flexibility—whether for reinvestment, acquisitions, or simply continuing to return value to shareholders. Badger Meter didn’t just grow in 2024—it did so with strength, clarity, and a clear eye on the long term.
Chart Analysis
Price and Moving Averages
BMI has had a noticeable shift in momentum over the past few months. The chart shows a strong rally from late spring through the end of summer, with price action steadily climbing and the 50-day moving average (in red) staying comfortably above the 200-day (in blue). That kind of structure tends to reflect investor confidence and sustained upward momentum.
However, since peaking around late fall, the price has started to roll over. The 50-day moving average has now curled downward and recently crossed below the 200-day line—what some might refer to as a bearish crossover. It doesn’t mean a collapse is guaranteed, but it does signal a change in sentiment and possibly a longer consolidation phase or a deeper retracement. The recent price drop in early April, followed by a sharp bounce, stands out. That kind of movement suggests buyers are stepping in at lower levels, but volatility is clearly picking up.
Volume and Momentum
Looking at volume, the spike in trading activity during the sharp April decline is important. Heavier volume on a sell-off often points to capitulation, where weak hands exit positions. The rebound that follows could mark the early stages of a base-building process, though it’s too soon to call it confirmed.
The RSI (relative strength index) has mostly hovered below the midline in recent months, staying under the 50 mark. That hints at weakening momentum. Still, it hasn’t spent extended time in oversold territory, which means selling pressure has been consistent but not overwhelming. The bounce off the 30 RSI level in early April shows the market reacting to deeply discounted levels, potentially a sign of some technical support.
Overall Structure
The chart suggests that BMI had a solid run in 2023 and early 2024, but is now digesting those gains. The moving averages and momentum indicators are showing fatigue, and the price action is trying to find its footing. It’s a classic transition phase from strength to a more neutral, possibly corrective structure. If buyers continue to defend recent lows, that could build a foundation for future recovery, though for now, caution and patience are the key takeaways from the chart’s current shape.
Management Team
Badger Meter’s leadership is guided by Kenneth C. Bockhorst, who serves as Chairman, President, and CEO. Since stepping into the top role in 2019, Bockhorst has steered the company with a strong focus on operational performance and long-term strategic execution. His background in global operations has been a key factor in Badger Meter’s ability to scale smart water technology across an expanding customer base.
Supporting him is Robert A. Wrocklage, Senior Vice President and Chief Financial Officer. Wrocklage has played an important role in strengthening the company’s financial discipline since joining in 2018. His approach has helped maintain Badger Meter’s lean balance sheet and supported consistent cash flow generation.
Karen M. Bauer serves as Vice President of Investor Relations, Corporate Strategy, and Treasurer. She has been instrumental in shaping investor communications and aligning the company’s strategic priorities. Fred J. Begale leads engineering and product development, keeping innovation at the center of Badger Meter’s growth. On the legal and compliance side, William R.A. Bergum brings structure to governance as General Counsel. And overseeing global operations is Richard Htwe, whose experience in international manufacturing and supply chain strategy brings operational resilience to the organization.
Together, this leadership group blends experience, discipline, and a forward-looking mindset that has helped the company remain focused through various economic cycles.
Valuation and Stock Performance
Badger Meter’s stock has seen meaningful gains over the past year, climbing nearly 32% and outperforming broader market benchmarks. The stock recently traded around $208, which puts it about 13% below its 52-week high. That pullback may reflect some market digestion after a strong run, but it’s also consistent with broader volatility across mid-cap industrials in recent months.
On the valuation front, the stock trades at a premium relative to peers. That’s not surprising given the 18% revenue growth and 35% increase in earnings per share the company posted last year. While some models flag the stock as trading above fair value, investors have historically been willing to pay up for the consistency and high return on capital Badger Meter offers.
The average 12-month price target from analysts sits around $225, suggesting there’s still some runway left—though expectations are measured. This is the kind of stock where valuation often reflects confidence in leadership and a proven track record, more than just raw growth potential.
Risks and Considerations
As steady as Badger Meter has been, it’s not without its risks. The most immediate concern is valuation. At current levels, the stock doesn’t leave much margin for error, particularly if growth slows or if input costs rise faster than expected. With supply chain volatility still lingering across the industrial sector, any disruption could pressure margins.
Competition is also tightening in the smart water and infrastructure tech space. While Badger Meter is well-positioned with decades of experience, new entrants and technological shifts could change the landscape faster than expected. Maintaining an innovation edge will be key.
There’s also the matter of cyclical exposure. Though demand for water infrastructure tends to be more stable than other sectors, municipal budgets and spending priorities can shift, especially in tighter economic conditions. Lastly, as with any company operating globally, currency fluctuations and geopolitical uncertainty can introduce short-term noise into what is otherwise a well-run operation.
These aren’t deal-breakers, but they are considerations that come into play when the market already has high expectations priced in.
Final Thoughts
Badger Meter’s performance over the past year highlights what happens when strategy, innovation, and execution align. The company’s leadership team brings clarity and consistency, and its long-term investments in smart water technology are clearly paying off. Financially, it’s in a strong place—carrying little debt, generating steady free cash flow, and growing earnings at an impressive clip.
That said, expectations are high, and the stock’s valuation reflects that optimism. For investors looking at the company today, it’s worth balancing that premium with the understanding that Badger Meter isn’t just growing—it’s doing so with discipline and long-term focus.
As always, the real test will be how the company performs over the next few quarters, particularly in managing costs, navigating competitive pressure, and capitalizing on demand from utility customers modernizing their infrastructure. If it keeps hitting those marks, it should continue carving out its space as a consistent and focused player in an increasingly essential industry.