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Badger Meter Hits 52-Week High: What's Driving the Stock?

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Shares of instruments control provider, Badger Meter, Inc. (BMI - Free Report) scaled a new 52-week high of $54.30 in yesterday’s trading session, before closing a tad lower at $54.05. In the past year, the stock has gained 21% compared with 28.6% growth for the industry.



Growth Drivers

Badger Meter reported promising results for second-quarter 2018. The company registered both record revenues and adjusted earnings driven by higher domestic municipal sales of its flagship products and increased international sales, notably in the Middle East.

The company recently announced a 15.4% year-over-year hike in its quarterly dividend payout. The proposed dividend of 15 cents per share or 60 cents on an annualized basis is payable Sep 14 to shareholders of record as on Aug 31.

Moreover, Badger Meter joined AT&T Smart City Alliance — a framework created by AT&T Inc. (T - Free Report) — to help cities provide smart water metering solutions. Notably, AT&T’s smart cities framework is backed by an association of key technology leaders and industry organizations who are working together to help cities address critical issues like high energy costs, transportation, aging infrastructure and public safety by using the Internet of Things. Thus, the integration of AT&T’s widespread network and Badger Meter’s cellular advanced metering infrastructure solutions will help utilities boost water sustainability. The collaboration is in sync with Badger Meter’s plan to offer smart city water metering solutions by utilizing cellular networks.

Management remains positive about the second half of the year backed by a number of reasons like a sizable backlog, continued interest in flagship products and the recent moderating of copper prices. It also expects many of the strategic initiatives from 2018 to contribute to the company’s solid performance in 2019. Opportunities for 2019 and beyond include Phyn — a joint venture between Belkin International, Inc. and Uponor Corporation — which utilizes Badger Meter’s D-Flow ultrasonic technology in a smart water monitoring system for residential use. The company’s ORION Cellular products will be ready with LTE-M chips in the first quarter of 2019.

With continued growth impetus and core focus, the Zacks Rank #3 (Hold) stock is anticipated to hit new 52-week milestones in the remainder of 2018.

Stocks to Consider

Better-ranked stocks in the industry include Transcat, Inc. (TRNS - Free Report) and Woodward, Inc. (WWD - Free Report) , both carrying a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Transcat has a long-term earnings growth expectation of 8%. It surpassed earnings estimates thrice in the trailing four quarters with an average positive surprise of 26%.     

Woodward has a long-term earnings growth expectation of 12.3%. It surpassed earnings estimates thrice in the trailing four quarters with an average positive surprise of 2.4%.      

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