Badger Meter, Inc. (BMI): A Bull Case Theory

We came across a bullish thesis on Badger Meter, Inc. on Max Dividends’s Substack by Serhio MaxDividends and Max Dividends. In this article, we will summarize the bulls’ thesis on BMI. Badger Meter, Inc.'s share was trading at $179.23 as of October 8th. BMI’s trailing and forward P/E were 39.16 and 34.13 respectively according to Yahoo Finance.

Badger Meter (BMI) represents a rare combination of stability, growth, and reliable income, making it an attractive long-term investment. The company has increased its dividend for 33 consecutive years, including a recent 18% hike in August 2025, and prior raises of 26% in 2024 and 18% in 2023. While the current yield is modest at ~0.9%, the combination of a conservative 31% payout ratio and double-digit dividend growth transforms it into meaningful income over time.

BMI’s financial strength is underscored by flat 2024 revenue of $826.6 million alongside a 31% rise in net income, driven by operational efficiency and margin expansion. EPS hit a record high, and institutional ownership is robust at ~89%, signaling strong confidence from major investors like BlackRock, Vanguard, and State Street.

BMI stands out for its essential, recurring business in water measurement, with 85% of sales coming from mandatory replacements. The company also benefits from a growing SaaS segment, expanding 28% annually since 2019, now contributing roughly 7% of total sales. Sustainability and efficiency initiatives prevent over five billion gallons of water waste annually. Its focus contrasts with peers like Garmin and Benchmark Electronics, which are spread across diverse industries, giving BMI unmatched consistency.

The U.S. smart water market, regulatory mandates, and strategic acquisitions, such as SmartCover for wastewater monitoring, support high single-digit sales growth and margin expansion. Globally, water technology represents a $100B+ market, offering further runway. Analysts rate BMI mostly Buy to Strong Buy, with a 12-month price target of $237, implying ~33% upside. With its essential business, recurring revenues, disciplined management, and long track record of dividend growth, Badger Meter exemplifies a quietly compounding, high-quality investment.

Previously we covered a bullish thesis on Badger Meter, Inc. (BMI) by Durable Value Creators in November 2024, which highlighted its leadership in smart water solutions, recurring revenue, and growth from AMI adoption. The stock has depreciated ~18% since then due to broader market pressures. The thesis still stands as BMI’s essential business and SaaS growth remain strong. Serhio MaxDividends shares a similar view but emphasizes BMI’s dividend track record and financial discipline.

Badger Meter, Inc. is not on our list of the 30 Most Popular Stocks Among Hedge Funds. As per our database, 32 hedge fund portfolios held BMI at the end of the second quarter which was 39 in the previous quarter. While we acknowledge the potential of BMI as an investment, we believe certain AI stocks offer greater upside potential and carry less downside risk. If you're looking for an extremely undervalued AI stock that also stands to benefit significantly from Trump-era tariffs and the onshoring trend, see our free report on the best short-term AI stock.

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Disclosure: None.