BMI- A Value and Income Play in the Industrial Sector

2026-05-27 05:01:00 ET

Badger Meter Inc. ( BMI ) was founded in 1905 and today manufactures meters and valves used to measure and control the flow of liquids such as water, oil, and chemicals. The company also produces products used to control the flow of air and other gases, notes Ben Reynolds , editor of Sure Dividend Growth .

Badger Meter generated $917 million in revenue last year and currently has a market capitalization of roughly $3.4 billion. On April 17, the company reported Q1 results for the period ending March 31. Revenue declined 9% to $202.3 million, while earnings per share of $0.93 compared unfavorably to $1.30 in the prior year.

The utility water business fell 10% due to project timing and softer municipal customer ordering, although strength in SaaS, SmartCover, water quality, and network monitoring partially offset the weakness. Gross margin declined 120 basis points to 41.7%, while operating margin contracted 480 basis points to 17.4%. Reynolds currently forecasts 2026 EPS of $5.13, representing 7.1% year-over-year growth.

The company also recently completed its acquisition of UK-based UDlive for $100 million plus contingent consideration, expanding its sewer line monitoring business. Plus, Badger Meter’s dividend appears highly secure, supported by a 33-year streak of consecutive increases and a conservative 31% payout ratio.

Overall, the rapid adoption of ultrasonic smart meters and the company’s higher-margin BEACON SaaS platform have helped drive strong earnings growth in recent years. Looking ahead, Reynolds forecasts 15% annual EPS growth, supported by ongoing advanced metering infrastructure replacement, rising software penetration, and continued infrastructure investment.

Recommended Action: Buy BMI.

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