Badger Meter (NYSE: BMI) is what happens when a sleepy 33-year Dividend Aristocrat quietly becomes a software company and almost nobody re-rates it in their head. It makes the smart water meters utilities are slowly installing everywhere — and, increasingly, the recurring-revenue analytics that ride on top.
By Ruslan Averin.
The setup
| Metric | Value (Jul 16, 2026) |
|---|---|
| Share price | ~$148.26 |
| Market cap | ~$4.33B |
| Dividend / yield | $1.60 / ~1.1% |
| Dividend streak | 33 years (Aristocrat) |
| P/E (trailing / forward) | ~33 / ~32 |
| Q1 26 revenue | $202.3M (−9% YoY) |
The bull case
The structural story is a multi-decade replacement cycle: utilities swapping manual and drive-by meters for cellular smart meters, each one attaching subscription software and "beyond-the-meter" hardware. SaaS revenue topped $74 million in 2025, up 27%, and the SmartCover sewer-monitoring business is compounding. This is a hardware franchise turning into a water-data platform — a much better business than "meter maker" implies.
The two problems
First, valuation: even after a rough year, BMI trades near 33x trailing earnings into decelerating revenue. Q1 sales fell 9% on lumpy municipal timing, and a 33x multiple leaves no room for another stumble. Second, and I won't soft-pedal it, there is an active securities class action — consolidated suits allege the company pulled orders forward to mask softening demand, covering a class period into April 2026. That's a genuine overhang, not a footnote.
Bottom line
Badger Meter is a high-quality Aristocrat becoming a recurring-revenue water-software platform — a real, under-appreciated transition — but it's priced for perfection and carries a live litigation cloud. Fascinating business, demanding price, open legal question. I do not hold the shares and am not telling anyone to buy or sell — this is analysis, not advice.