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Badger Meter Hits 52-Week High on Favorable Growth Dynamics

Shares of instruments control provider, Badger Meter, Inc. BMI scaled a new 52-week high of $57.12 in yesterday’s trading session, before closing a tad lower at $55.44. In the past year, the stock has gained 22% compared with 2.3% growth recorded by the industry.

What's Driving the Outperformance?

Badger Meter’s products measure water, oil, chemicals and other fluids, and are known for accuracy, long-lasting durability and for providing valuable and timely measurement data. Management remains optimistic about the remainder of 2018 and 2019 on the back of solid backlog, overwhelming customer acceptance of new products and moderating copper prices. The company is making steady progress in its various innovative technologies, including D-Flow ultrasonic technology, which has the dual benefit of providing additional features for customers while improving its cost position.

Furthermore, inclusion in AT&T Inc. T Smart City Alliance enables Badger Meter to explore new ways for its smart water solutions to join forces with industry-leading cellular networks. The company’s focus on enhancing shareholders’ value through organic and inorganic investments supported by its strong balance sheet is commendable.

Badger Meter’s opportunities for 2019 and beyond include Phyn — a joint venture between Belkin International, Inc. and Uponor Corporation — which utilizes its D-Flow ultrasonic technology in a smart water monitoring system for residential use. The company is poised to gain from growing demand for E-Series meters and ORION cellular endpoints, as well as BEACON Advanced Metering Analytics managed solution. For ORION Cellular, Badger Meter will launch Cat-M chips, which are the next-generation chips for business-to-business cellular communication in first-quarter 2019. The company’s ORION Cellular products will be ready with LTE-M chips in the first quarter of 2019.

The Zacks Consensus Estimate for current-year earnings has been revised 5.6% upward over the past 60 days.

With continued growth impetus and core focus, the Zacks Rank #1 (Strong Buy) stock is anticipated to hit new 52-week milestones in the remainder of 2018.

Other Stocks to Consider

Other top-ranked stocks in the broader industry include Allied Motion Technologies Inc. AMOT, sporting a Zacks Rank #1 and Motorola Solutions, Inc. MSI, carrying a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Allied Motion has a long-term earnings growth expectation of 10%. It surpassed earnings estimates thrice in the trailing four quarters, the average positive surprise being 41.2%.     

Motorola has a long-term earnings growth expectation of 9.8%. It beat earnings estimates in each of the trailing four quarters, the average being 12.7%.          

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