Badger Meter, Inc. BMI

Badger Meter looks like a durable compounder: essential products, rising software mix, sticky utility relationships, and a long runway in AMI and sewer monitoring. Returns are healthy (ROIC ~16–17%) with 5‑year incremental ROIC ~25%, cash conversion is excellent, and the balance sheet is net‑cash, enabling steady reinvestment and dividends (Key compounder indicators; Cash flow statement analysis; Latest SEC filing (10‑Q) analysis). Execution risks—tariffs, single‑source inputs, big‑tender competition, and new acquisition integration—are real but appear manageable given pricing actions, product breadth, and financial flexibility (Q2‑2025 10‑Q; Supplier analysis). On valuation, a scenario DCF frames a base case around $152.67 per share, with bear/bull of ~$95/~$246, compared with a current price of ~$176 as of Sep‑2025; that suggests the market is already underwriting solid execution and mix gains (Valuation; Company profile and current stock price). For long‑term investors focused on moat durability, reinvestment runway, and cash discipline, Badger Meter offers high‑quality economics with clearly identified watch‑items to monitor in coming quarters.