Analysis: Badger Meter (BMI)
- Dave Freedman
- Sep 9, 2025
- 3 min read
Updated: Nov 24, 2025
Will water infrastructure spending cuts hurt BMI stock?
Water Sector LTP initiated coverage of Badger Meter, Inc. (NYSE:BMI), on 8/27/25 when the stock price was $188.40.
BMI’s all-time high was $248.22 on 5/30/25. BMI stock closed at $245.22 on 7/21/25. The next day, BMI released a downbeat quarterly earnings (with especially disappointing earnings per share), and the stock price fell precipitously over the next two days to $189.22. The stock price today, at the close of 9/9/25, remains about 28% off its all-time high, at $179.
The Company
Based in Milwaukee, BMI is widely considered a pioneer in water meters and an innovator in “smart water” technology. The company manufactures water measurement equipment in three categories: (a) water flow meters and related technologies such as data transmission devices and analytics software; (b) water quality monitoring solutions such as electrochemical and optical sensing instruments; and (c) high-frequency pressure and acoustic leak detection hardware. These products can measure flow of other liquids besides water, as well as gases, but water represents 95% of its net sales.
A growing segment of BMI’s business is subscription-based software, also known as software-as-a-service (SaaS), which generates higher margins.
Its customers include water and wastewater utilities, municipalities, and various commercial and industrial markets worldwide. BMI’s “smart water” metering solutions help its customers optimize the delivery and discharge of water in order to maximize revenue and reduce waste. The company derives a majority of its revenues from the USA. No single customer account for more than 10 percent of sales.
In 2024, about 90% of sales were in the USA. Europe was the second-biggest market at 4.5%. Third was the Middle East at 2%, followed by Asia, Canada, and Mexico.
Competitors include Xylem, Roper Technologies, Veralto, Hubbel, Emerson Electric, and others.
To maintain its position as an innovator, BMI spent an impressive $19.2 million on R&D in 2024, out of $826.6 million net sales (which was up 17.5% from 2023 net sales). R&D activities include developing new products, improving existing products, and improving the manufacturing process.
Quantities
BMI has enjoyed steady revenue growth over the last 25 years, including 18% average sales growth between 2021 and 2024, plus more than 35% increase in earnings in both 2023 and 2024.
At the end of 2024, assets were $816 million (including $295 million in cash) and liabilities were $210 million; current liabilities were $118 million. The current ratio is a healthy 3.2.
The company now pays a 0.7% dividend yield ($0.40 per share on 9/5/25), and dividends have increased for 32 consecutive years. It uses only 25% of its free cash flow to pay these dividends, so we can expect dividend growth to continue.
BMI’s price/earnings ratio is around 40, compared with the industry PE ratio of 48, according to Stock Rover. The S&P 500 PE is 30.
Headwind
Some investors might be tempted to buy the dip today. But consider that the infrastructure spending boom of the past few years benefited BMI, and now the Trump administration is foolishly proposing huge cuts in funding for water infrastructure, testing, and safety projects in the USA and worldwide. (Below is a short list of news sources.)
Recommendation
We suggesting waiting until after the 2026 midterm elections to see what the Trump administration and/or Congress want to do about water infrastructure project funding. Today on 9/9/25, as the stock closes at $179.44, we issue a HOLD recommendation.
Sidebar: News Sources on Water Project Cuts
Trump's funding cut stalls water projects, increasing risks for millions
6/21/25 -- Reuters
How Congressional Republicans’ Spending Bill Threatens Our Water
8/18/25 -- Food & Water Watch
Trump administration proposal would cut nearly 90% of federal funding to West Virginia water and sewer programs
6/6/25 -- Mountain State Spotlight
Critical Months Ahead for the Great Lakes in Congress
6/17/25 -- Alliance for the Great Lakes
President’s Budget Spurring Strong Pushback to Preserve Clean Water Investment
5/27/25 -- National Assn of Clean Water Agencies
Trump's 2026 Budget Cuts: What Will They Mean For The Water Industry?
5/8/25 -- Water Online
Will Congress Defy Trump on Water Infrastructure Spending?
6/10/25 -- Circle of Blue
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