Badger Meter Inc (BMI) stock analysis

P/E below its 5-year median

Badger Meter's P/E of 33.1 is below its own 5-year median of 50.5.

P/E below the industry

Badger Meter's P/E of 33.1 is below the Laboratory Apparatus and Analytical, Optical, Measuring, and Controlling Instruments median of 36.5.

EV/EBITDA below its 5-year median

Badger Meter's EV/EBITDA of 24.3 is below its 5-year median of 40.7.

P/B above the industry

Badger Meter's price-to-book of 6.96 is above the Laboratory Apparatus and Analytical, Optical, Measuring, and Controlling Instruments median of 3.17.

Trading below fair value

The share price of $158.71 is below our fair value estimate of $196.35.

Margin of safety under 20%

The price is 19.2% below fair value, less than the 20% cushion we look for.

Revenue growing 10%+ a year

Revenue grew 17.5% a year over the last three fiscal years.

EPS growing 10%+ a year

Diluted EPS grew 28.5% a year over the last three fiscal years.

Earnings growth not accelerating

Net income grew 13.4% over the last twelve months, against a 5-year average of 23.5% a year.

Growing faster than the industry

Revenue grew 10.9% over the last twelve months; the Laboratory Apparatus and Analytical, Optical, Measuring, and Controlling Instruments median is 8.4%.

Company guidance

No outlook found in earnings releases from the last twelve months.

Gross margin improving

Gross margin was 41.7% over the last twelve months, against 39.8% a year earlier.

Return on equity over 15%

Return on equity was 22.5% over the last twelve months and averaged 18.9% over five years.

Return on capital over 10%

Return on invested capital was 30.8%, above the 10% that usually covers the cost of capital.

Return on equity above the industry

Badger Meter's return on equity of 22.5% is above the Laboratory Apparatus and Analytical, Optical, Measuring, and Controlling Instruments median of 1.1%.

Earnings grew over 5 years

Net income grew 23.5% a year on average over the last five fiscal years.

Net margin above its 5-year average

Net margin was 15.5% over the last twelve months, against a 5-year average of 13.5%.

Net margin above the industry

Badger Meter's net margin of 15.5% is above the Laboratory Apparatus and Analytical, Optical, Measuring, and Controlling Instruments median of -1.3%.

No debt

Badger Meter has no borrowings on its latest balance sheet.

Debt not rising

With no debt today, leverage cannot have risen.

Debt covered by cash flow

There is no debt to cover.

Interest well covered

No meaningful interest expense to cover.

Short-term assets cover short-term debts

Current assets are 2.48 times current liabilities.

Low bankruptcy risk

The Altman Z-score is 12.23; above 3 is the safe zone and below 1.8 the distress zone.

Pays a dividend

Badger Meter paid dividends worth 1.0% of the share price over the last twelve months.

Yield below Treasuries

The 1.0% yield is below the 4.4% on a 1-year Treasury.

Yield below the top quarter

The top quarter of US dividend payers yield 3.8% or more; Badger Meter yields 1.0%.

Dividend not cut

The dividend per share has not fallen by more than 10% in any of the last 10 fiscal years.

Covered by earnings

Dividends take 30.7% of net income.

Covered by free cash flow

Dividends take 25.7% of free cash flow.