Reviewing Veralto (NYSE:VLTO) & Badger Meter (NYSE:BMI)

Badger Meter (NYSE:BMI) and Veralto (NYSE:VLTO) are both technology companies, but which is the better stock? We will compare the two companies based on the strength of their valuation, dividends, analyst recommendations, institutional ownership, earnings, risk and profitability.

Insider & Institutional Ownership

89.0% of Badger Meter shares are held by institutional investors. Comparatively, 91.3% of Veralto shares are held by institutional investors. 1.0% of Badger Meter shares are held by company insiders. Comparatively, 0.4% of Veralto shares are held by company insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a company will outperform the market over the long term.

Analyst Recommendations

This is a breakdown of current ratings and recommmendations for Badger Meter and Veralto, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Badger Meter	1	5	6	0	2.42
Veralto	0	4	6	0	2.60

Badger Meter currently has a consensus target price of $162.00, indicating a potential upside of 21.84%. Veralto has a consensus target price of $112.50, indicating a potential upside of 19.18%. Given Badger Meter’s higher probable upside, equities analysts clearly believe Badger Meter is more favorable than Veralto.

Profitability

This table compares Badger Meter and Veralto’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Badger Meter	14.27%	18.03%	12.82%
Veralto	17.35%	34.76%	13.38%

Dividends

Badger Meter pays an annual dividend of $1.76 per share and has a dividend yield of 1.3%. Veralto pays an annual dividend of $0.52 per share and has a dividend yield of 0.6%. Badger Meter pays out 41.1% of its earnings in the form of a dividend. Veralto pays out 13.1% of its earnings in the form of a dividend. Both companies have healthy payout ratios and should be able to cover their dividend payments with earnings for the next several years. Badger Meter has increased its dividend for 32 consecutive years and Veralto has increased its dividend for 1 consecutive years. Badger Meter is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Volatility and Risk

Badger Meter has a beta of 0.65, suggesting that its stock price is 35% less volatile than the S&P 500. Comparatively, Veralto has a beta of 0.6, suggesting that its stock price is 40% less volatile than the S&P 500.

Earnings and Valuation

This table compares Badger Meter and Veralto”s gross revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Badger Meter	$880.96 million	4.38	$141.63 million	$4.28	31.07
Veralto	$5.50 billion	4.18	$940.00 million	$3.96	23.84

Veralto has higher revenue and earnings than Badger Meter. Veralto is trading at a lower price-to-earnings ratio than Badger Meter, indicating that it is currently the more affordable of the two stocks.

About Badger Meter

Badger Meter, Inc. manufactures and markets flow measurement, quality, control, and communication solutions worldwide. It offers mechanical or static water meters, and related radio and software technologies and services to municipal water utilities market. The company also provides flow instrumentation products, including meters, valves, and other sensing instruments to measure and control fluids going through a pipe or pipeline, including water, air, steam, and other liquids and gases to original equipment manufacturers as the primary flow measurement device within a product or system, as well as through manufacturers' representatives. In addition, the company offers ORION Cellular endpoints to power network as a service; ORION mobile read endpoints support for deploying AMR solution; radio products; hardware, instruments, and sensors, and related software, to enhance connected data to a water utility's operation; water quality monitoring solutions, including optical sensing and electrochemical instruments; and high frequency pressure and leak detection sensors to aid in burst pipe and leak events; as well as BEACON, a secure cloud-hosted software suite that establishes alerts for specific conditions and allows consumer engagement tools that permit end water customers to view and manage their water usage activity. Its flow instrumentation products are used in water/wastewater, heating, ventilating and air conditioning, and corporate sustainability markets. The company serves water utilities, commercial, and industrial industries; and provides training, project management, technical support, and other collaborative services for customers. It sells its products and software directly, as well as through resellers and representatives. The company was incorporated in 1905 and is based in Milwaukee, Wisconsin.

About Veralto

Veralto Corporation provides water analytics, water treatment, marking and coding, and packaging and color services worldwide. It operates through two segments, Water Quality (WQ) and Product Quality & Innovation (PQI). The WQ segment offers precision instrumentation and water treatment technologies to measure, analyze, and treat water in residential, commercial, municipal, industrial, research, and natural resource applications through the Hach, Trojan Technologies, and ChemTreat brands. This segment provides water solutions, including chemical reagents, services, and digital solutions. The PQI segment offers inline printing solutions for products and packaging with marking and coding systems; marking and coding for packaged goods and related consumables; design software and imaging systems for the creation of new packaging designs; color management solutions for printed packages and consumer and industrial products; color standard services for the design industry; and a software solution that provides digital asset management, marketing resource management, and product information management. This segment sells its products and services through the Videojet, Linx, Esko, X-Rite, and Pantone brands to regulated industries, including municipal utilities, food and beverage, pharmaceutical, and industrials. The company was formerly known as DH EAS Holding Corp. and changed its name to Veralto Corporation in February 2023. Veralto Corporation was incorporated in 2022 and is headquartered in Waltham, Massachusetts.