Watts Water Technologies (NYSE:WTS) and Badger Meter (NYSE:BMI) Head to Head Comparison

Watts Water Technologies (NYSE:WTS) and Badger Meter (NYSE:BMI) are both mid-cap computer and technology companies, but which is the better business? We will contrast the two businesses based on the strength of their risk, dividends, profitability, analyst recommendations, valuation, earnings and institutional ownership.

Profitability

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

	Net Margins	Return on Equity	Return on Assets
Watts Water Technologies	13.07%	17.59%	12.34%
Badger Meter	15.74%	22.35%	16.27%

Dividends

Watts Water Technologies pays an annual dividend of $2.08 per share and has a dividend yield of 0.8%. Badger Meter pays an annual dividend of $1.36 per share and has a dividend yield of 0.6%. Watts Water Technologies pays out 23.8% of its earnings in the form of a dividend. Badger Meter pays out 30.0% 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. Watts Water Technologies has increased its dividend for 13 consecutive years and Badger Meter has increased its dividend for 32 consecutive years. Watts Water Technologies is clearly the better dividend stock, given its higher yield and lower payout ratio.

Valuation and Earnings

This table compares Watts Water Technologies and Badger Meter”s gross revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Watts Water Technologies	$2.25 billion	3.76	$291.20 million	$8.73	29.09
Badger Meter	$826.56 million	8.64	$124.94 million	$4.54	53.40

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

Volatility and Risk

Watts Water Technologies has a beta of 1.12, indicating that its stock price is 12% more volatile than the S&P 500. Comparatively, Badger Meter has a beta of 0.83, indicating that its stock price is 17% less volatile than the S&P 500.

Insider & Institutional Ownership

95.0% of Watts Water Technologies shares are owned by institutional investors. Comparatively, 89.0% of Badger Meter shares are owned by institutional investors. 1.1% of Watts Water Technologies shares are owned by insiders. Comparatively, 0.9% of Badger Meter shares are owned by insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a stock will outperform the market over the long term.

Analyst Recommendations

This is a breakdown of current recommendations for Watts Water Technologies and Badger Meter, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Watts Water Technologies	0	4	1	0	2.20
Badger Meter	0	3	3	0	2.50

Watts Water Technologies presently has a consensus price target of $231.20, indicating a potential downside of 8.96%. Badger Meter has a consensus price target of $236.60, indicating a potential downside of 2.41%. Given Badger Meter’s stronger consensus rating and higher possible upside, analysts clearly believe Badger Meter is more favorable than Watts Water Technologies.

Summary

Badger Meter beats Watts Water Technologies on 9 of the 17 factors compared between the two stocks.

About Watts Water Technologies

Watts Water Technologies, Inc., together with its subsidiaries, supplies products and solutions that manage and conserve the flow of fluids and energy into, through, and out of buildings in the commercial, industrial, and residential markets in the Americas, Europe, the Asia-Pacific, the Middle East, and Africa. The company offers residential and commercial flow control and protection products, including backflow preventers, water pressure regulators, temperature and pressure relief valves, thermostatic mixing valves, leak detection and protection products, commercial washroom solutions, and emergency safety products and equipment for plumbing and hot water applications. It also provides heating, ventilation, and air conditioning and gas products comprising commercial boilers; water heaters and heating solutions; hydronic and electric heating systems for under-floor radiant applications; custom heat and hot water solutions; hydronic pump groups for boiler manufacturers and alternative energy control packages; and flexible stainless-steel connectors for natural and liquid propane gas in commercial food service and residential applications. In addition, the company offers drainage and water re-use products, such as drainage products, engineered rainwater harvesting solutions for commercial, industrial, marine, and residential applications; connected roof drain systems; and water quality products that include point-of-use and point-of-entry water filtration, conditioning, and scale prevention systems for commercial, marine, and residential applications. The company sells its products to plumbing, heating, and mechanical wholesale distributors and dealers; original equipment manufacturers; specialty product distributors; and do-it-yourself and retail chains, as well as wholesalers and private label accounts. Watts Water Technologies, Inc. was founded in 1874 and is headquartered in North Andover, Massachusetts.

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.