Deep Dive — Badger Meter (BMI)
Water. Data. Dough. How a “boring” meter company quietly prints money.
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Intro
💡 Invest in companies you believe in - W. Buffett
Let’s be honest: water meters aren’t exciting. They’re not Teslas, not Apple gadgets, not AI. But here’s the truth: sometimes it’s the “boring” businesses that make investors truly wealthy.
Take Badger Meter. They make the meters and software that track water use and leaks for homes, factories, and cities. Not glamorous — but essential. And essential businesses tend to keep paying.
If you’d invested $1 in 2000, you’d have about $74 today. Even after a recent 27% pullback, Badger looks like a Dividend Eagle worth keeping on your radar.
A Century in the Making
1905 — Solving frozen winters
In Milwaukee, frozen pipes destroyed water meters every year. A small shop came up with a fix: a frost-proof water meter with a replaceable bottom plate. Instead of buying a new meter, you swapped a cheap part. A simple idea — and suddenly, demand exploded.
1920s — Scaling to cities
By the 1920s, Badger wasn’t just selling to households anymore. Entire cities trusted them to handle water billing. Even in the Depression, people still had water bills — so demand held steady.
1940s — War changes everything
When WWII hit, Badger pivoted fast. Instead of meters, it built 7 million bomb fuzes. That kept the business alive and sharpened its manufacturing skills.
1950s–60s — Riding the post-war boom
Badger expanded into new instruments, acquired smaller firms, and set up subsidiaries in Mexico and South America. It was no longer just a meter company — it was a precision manufacturer.
1971 — Going public
Badger listed on the stock exchange, giving it capital and visibility. For investors, that marked the start of decades of consistent dividends.
1980s–2000s — From brass to digital
Meters evolved. The company shifted from mechanical to electronic, adding accuracy and durability. Step by step, Badger became a tech-focused business.
Today — BlueEdge™ and SaaS
Fast-forward to now. Badger’s BlueEdge™ platform ties hardware to data. Utilities can see leaks in real time, save billions of gallons, and cut costs. And instead of one-off sales, Badger now makes recurring SaaS revenue — software subscriptions that grow year after year.
From frozen pipes in Milwaukee to smart water dashboards for entire cities — that’s a century of staying relevant.
The Dividend Story
A paycheck that keeps growing
Most of us beg for raises. Badger investors? They get one every year, no questions asked.
33 years in a row of dividend increases (Dividend Eagle 🦅).
Latest hike (Aug 2025): +18% to $0.40 a share quarterly ($1.60 annually).
Prior years: +26% in 2024, +18% in 2023.
That’s a three-year streak of double-digit raises. If you owned the stock for five or six years, your income likely doubled.
Yes, the yield looks small at ~0.9%. But here’s the kicker: with 15–20% annual growth, a “tiny” dividend becomes real money faster than most realize. And with a payout ratio of just 31% (well below its 10-year average), there’s plenty of room to keep hiking.
This isn’t about a fat check today — it’s about a reliable raise every single year.
Financial Strength
Flat sales, fatter profits.
In 2024, revenue stayed flat at $826.6M. Sounds boring, right? But Badger managed to grow net income by 31% anyway.
How? Efficiency. Management squeezed more profit out of the same sales. That’s the kind of discipline that protects dividends.
EPS: record high.
Payout ratio: 31% (safe).
Financial Score: 98 / 99 ⭐️⭐️⭐️⭐️⭐️+.
Institutional ownership: ~89% (with BlackRock, Vanguard, and State Street as top holders).
Big money trusts Badger. And when the giants hold nearly 9 out of 10 shares, that’s a strong vote of confidence.
What Makes BMI Stand Out
Essential product. You can delay buying a car. You can’t delay water.
Built-in demand. 85% of sales are replacements. When old meters wear out, new ones are mandatory.
Recurring SaaS revenue. Growing 28% annually since 2019, now ~7% of total sales.
Sustainability. Prevents waste of 5+ billion gallons annually.
Margin expansion. Software and efficiency are driving fatter profits.
Competitors
Badger has neighbors in tech and electronics:
Garmin (GRMN): instrumentation giant, Financial Score 98.
Benchmark Electronics (BHE): electronics manufacturer, Financial Score 83.
They’re strong, but they’re spread across many industries. Badger? It’s stayed laser-focused on water for more than a century. That focus = consistency.
Yes, the stock trades at a premium compared to peers. But that’s the price of reliability.
Market Outlook
A wave of upgrades
The U.S. smart water market is worth about $2.1B and growing fast. Utilities have to modernize, and Badger is right at the center.
Regulation pushes demand
Water conservation isn’t optional — it’s mandated. That makes Badger’s solutions sticky.
Acquisitions add growth
Buying SmartCover expanded into wastewater monitoring, creating new cross-selling opportunities.
Global runway
Worldwide, water tech is a $100B+ market. From drought-stricken Europe to fast-growing Asian cities, demand is only increasing.
Management’s target: high single-digit sales growth plus margin gains from SaaS.
Valuation & Analysts
Yes, Badger trades at a premium P/E compared to peers. But that’s what happens when a company is trusted to deliver.
Wall Street’s verdict: mostly Buy to Strong Buy.
12-month price target: $237 (about +33% upside from $178).
High target: $264.
A few analysts call it a “Hold” — but that’s about valuation, not business strength.
Final Take
Badger Meter isn’t flashy, but that’s the point. For more than a century, it’s turned simple water meters into a business model that delivers stability, rising payouts, and long-term compounding.
33 years of dividend raises
Conservative 31% payout ratio
Essential, recurring business
A growing SaaS kicker on top
Analysts see +30% upside
That’s exactly the kind of stock you want quietly working in the background of your portfolio.
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Badger Meter shows how “boring” companies can quietly build wealth over decades. That’s the kind of long game we play at MaxDividends.
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