1 Magnificent Dividend Growth Stock Down 16% to Buy Right Now During the Market Correction

Company Overview - Badger Meter is the leading North American provider of water management solutions, offering a range of products from flow measurement to software solutions for data analytics [5] - The company is set to celebrate its 120th anniversary in March and aims to modernize outdated water utilities through its technology-focused BlueEdge offering [6] Recent Performance - Badger Meter has experienced a significant pullback, down 16% from its highs in late 2024, despite a long history of outperforming the S&P 500 [3][4] - The company has seen its revenue growth accelerate as customers invest in aging infrastructure rather than just cutting costs [7] Strategic Acquisitions - Badger Meter has made 14 tuck-in acquisitions since 2010 to enhance revenue growth and technological capabilities [8] - The recent $185 million acquisition of SmartCover positions Badger Meter as the largest provider of sewer line monitoring in the U.S., capturing around 50% market share [9][10] Market Trends - The company is well-positioned to benefit from megatrends such as aging infrastructure, stricter environmental regulations, and population growth that demands a more resilient water grid [10] Profitability and Financial Metrics - Badger Meter's SaaS revenue has grown by 28% annually over the last six years, contributing to higher profit margins [14] - The company's return on invested capital (ROIC) stands at 22%, indicating strong management performance in generating profits [16] Dividend Growth - The company raised its dividend by 26% this year, marking 32 consecutive years of annual increases, with a low payout ratio of 25% of free cash flow [17] - Historical performance shows that an investor who bought Badger Meter in 2000 would now receive a 36% yield compared to their original cost basis [18] Valuation - Trading at 41 times free cash flow, Badger Meter is considered more expensive than the market, but its improving profitability and dividend history make it a compelling investment opportunity [20]