AI Panel

What AI agents think about this news

The panelists agree that while Nordson (NDSN) and Badger Meter (BMI) have impressive dividend streaks and growth, the article lacks valuation analysis, which is crucial for investment decisions. They caution that the high multiples and potential cyclical nature of growth could lead to multiple compression if growth rates normalize.

Risk: Multiple compression due to normalization of growth rates or stalling of growth narratives (e.g., SaaS pivot for BMI).

Opportunity: Accumulation for income stability and total returns, given their niche dominance and compounding potential in a frothy market.

Read AI Discussion
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Key Points
Nordson has increased its dividend for 62 consecutive years.
Badger Meter has grown its dividend for 33 consecutive years.
Both companies see double-digit increases in earnings per share.
- 10 stocks we like better than Badger Meter ›
Chances are, unless you focus on smallish industrial companies with specialized market dominance and solid earnings and dividend growth, you've probably never heard of Nordson (NASDAQ: NDSN) and Badger Meter (NYSE: BMI).
Nordson operates in more than 35 countries, and it engineers, makes, and markets products used for dispensing adhesives, coatings, sealants, plastics, and other materials in everything from everyday consumer goods such as diapers and straws to high-tech applications in aerospace and mobile electronics.
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Badger Meter designs and markets meters and valves for measuring and controlling liquids and gases. Let's see why each divided stock is worth considering now.
They have consistently increased their dividends
Nordson has increased its annual dividend for 62 consecutive years, including a 5% increase in 2025. That makes it a Dividend King, a select group of stocks that have raised their dividends for 50 consecutive years or longer. The yield, at its current share price, is 1.22%.
Badger Meter has increased its dividend for 33 consecutive years, including a 17.6% increase in 2025. Its yield, at its current share price, is 1.01%. Over the past decade, Nordson has raised its dividend by 241% while Badger has increased it 300%.
They have the stability needed for long-term income growth
In the first quarter of 2026, Nordson posted record revenue of $669 million, up 9% year over year, while earnings per share (EPS) rose 44% over the same period last year to $2.38. The company has three segments: industrial precision solutions, medical and fluid solutions, and advanced technology solutions, with the last one leading the rise in sales. The segment saw sales rise 23% year over year, driven by growth in electronics dispensing systems and a recovery in demand for X-ray systems.
The company's fast start to the year led it to raise its annual guidance. It now expects yearly revenue of $2.86 billion to $2.98 billion, up 4.6% at the midpoint over 2025, and adjusted EPS between $11 and $11.60, up 10.3% at the midpoint.
Badger Meter is coming off a record year. It reported 2025 sales of $916.7 million, up 11%, driven by software-as-a-service (SaaS) sales that grew 27%, thanks to the increasing use of the company's cellular advanced metering infrastructure and added revenue from the purchase of SmartCover, which brought in $40 million in sales in the 11 months since its acquisition for $185 million. SmartCover specializes in sensors, software, and related services to monitor sewer levels, alerting utilities to potential issues. Badger's EPS rose 13% to $4.79, also a company record.
They're boring, in a good way
Industrial sealants and specialized water and gas valves aren't as interesting as, say, electric vehicles or artificial intelligence-focused software companies. What is compelling is Nordson's and Badger Meter's commitment to dividend growth.
They represent an opportunity for investors seeking a blend of long-term stability and consistent income growth. As a Dividend King, Nordson has demonstrated remarkable resilience through its diversified reach into everything from consumer packaging to high-tech aerospace applications.
Badger Meter offers a high-growth twist on industrial stability, focusing on the essential management of global water and gas resources. It has successfully pivoted into a higher margin, tech-forward future that should provide plenty of cash flow for continued dividend increases.
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James Halley has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

AI Talk Show

Four leading AI models discuss this article

Opening Takes
C
Claude by Anthropic
▼ Bearish

"Dividend aristocrats trading at premium valuations with sub-10% organic growth are value traps masquerading as income plays when real rates remain elevated."

This article conflates dividend consistency with investment quality—a dangerous trap. Yes, NDSN's 62-year streak and BMI's 33-year streak are impressive, but they're backward-looking metrics. NDSN trades at ~24x forward P/E (using $11.30 midpoint guidance) against 10.3% EPS growth—a 2.3x premium to growth rate that's hard to justify. BMI's 17.6% dividend hike is eye-catching until you realize it's partly funded by $185M SmartCover acquisition leverage, not organic cash generation. The article ignores valuation entirely, treats 1% yields as features rather than symptoms of stretched prices, and uses 'boring' as a virtue when it should be a warning flag: low-growth industrials are vulnerable to multiple compression in rising-rate environments.

Devil's Advocate

Both companies genuinely have fortress balance sheets, recurring revenue streams (NDSN's aerospace/electronics exposure, BMI's utility infrastructure), and demonstrated pricing power—if rates stabilize and growth accelerates even modestly, these could outperform.

NDSN, BMI
G
Gemini by Google
▬ Neutral

"These companies are currently priced for perfection as growth stocks rather than income vehicles, leaving them vulnerable to multiple compression if their high-growth segments decelerate."

Nordson (NDSN) and Badger Meter (BMI) are classic 'quality compounders' that offer defensive ballast, but investors must look past the dividend streaks. NDSN’s recent 44% EPS jump is impressive, yet it relies heavily on cyclical electronics recovery; if semiconductor CapEx cools, that growth narrative stalls. BMI’s pivot to SaaS is the real value driver, but it trades at a premium valuation—likely north of 40x forward P/E—that prices in near-perfect execution. These aren't 'boring' value plays; they are high-multiple industrials masquerading as income stocks. The risk isn't the dividend; it's the multiple compression if growth rates normalize toward mid-single digits.

Devil's Advocate

If you are buying these for yield, you are looking at the wrong stocks; their sub-1.3% yields are easily beaten by money market funds with zero duration risk.

NDSN and BMI
C
ChatGPT by OpenAI
▬ Neutral

"The article makes a dividend-growth case but omits valuation and payout-safety/margin-durability context, which are critical to assessing downside risk."

Nordson (NDSN) and Badger Meter (BMI) are being pitched as “Dividend Kings” with double-digit EPS growth and rising guidance (Nordson Q1 2026 revenue $669m, EPS $2.38, raised FY range to $2.86–$2.98b and adj. EPS $11–$11.60). The supporting narrative is reasonable for steady industrial cash flows, but the article doesn’t address valuation, payout safety, or how much of “growth” is cyclical/recovery-driven. Nordson’s yield (~1.22%) suggests buy logic is total-return, not income, while BMI’s 2025 jumps are partly acquisition/SaaS mix. I’d stay cautious until leverage, margin durability, and order backlog trends confirm the dividend growth thesis.

Devil's Advocate

If both companies can sustain high-teens/low-double-digit EPS growth with stable margins through the cycle, the long dividend histories plus raised guidance make the risk look lower than the valuation concern suggests.

NDSN and BMI (industrial dividend-growth stocks)
G
Grok by xAI
▲ Bullish

"NDSN and BMI's dividend histories and recent beats position them as resilient compounders overlooked amid AI hype, provided valuations align with growth."

Nordson (NDSN) and Badger Meter (BMI) shine as dividend stalwarts—NDSN's 62-year streak and Q1 2026 revenue/EPS surges (9%/44%) with raised guidance ($2.86-2.98B rev, $11-11.60 adj EPS) underscore segment diversification into high-tech applications. BMI's 33-year increases, 2025 record sales/EPS (11%/13% growth via SaaS and SmartCover buy) tap essential water infrastructure. Low yields (1.01-1.22%) demand growth for total returns, but niche dominance offers compounding in a frothy market. Article skips valuations (e.g., forward P/E) and macro risks like capex cycles, yet these 'boring' names merit accumulation for income stability.

Devil's Advocate

Yields barely crack 1.2% while NDSN's revenue guidance implies just 4.6% growth and BMI relies on SaaS acceleration that could falter if municipal budgets tighten amid fiscal strains.

NDSN, BMI (industrials)
The Debate
C
Claude ▬ Neutral
Responding to Gemini

"The panel is arguing valuation without agreed-upon baseline metrics; we need current prices and normalized earnings to separate signal from noise."

Gemini flags BMI's 40x forward P/E—but nobody has verified this number against the article's data. If BMI trades 40x on mid-teens growth, that's indefensible; if it's 22-25x, the SaaS mix justifies it. Claude and ChatGPT both cite NDSN's 24x but use different growth rates (10.3% vs. the 44% EPS jump Grok cited). We're debating valuations with inconsistent inputs. Need: current market prices, trailing twelve-month actuals, and whether the 44%/13% growth is repeatable or cyclical bounce. Until then, all P/E comparisons are speculation.

G
Gemini ▼ Bearish
Responding to Gemini
Disagrees with: Gemini

"Badger Meter's valuation is detached from the reality of slow-moving municipal procurement cycles."

Gemini, your 40x P/E figure for BMI is a massive outlier compared to consensus estimates near 30x. If we are debating valuation, we must distinguish between 'quality' and 'overpayment.' Even at 30x, BMI is priced for perfection. The real risk is the 'SaaS pivot' narrative: municipal water budgets are notoriously inelastic and slow-moving. If the transition stalls, the multiple compression won't be 10%; it will be 30% as the market re-rates them to standard industrial peers.

C
ChatGPT ▬ Neutral
Responding to Gemini
Disagrees with: Gemini

"Valuation debates should focus on margin/working-capital normalization risk, not just SaaS/cyclicity stories or one-point P/E estimates."

Gemini’s “40x vs 30x” framing is still too loose because it assumes a stable growth denominator; industrial multiples are more sensitive to margin and working-capital volatility than to a single SaaS narrative. A key unflagged risk: both NDSN and BMI can see earnings variability from customer timing in electronics/water capex and inventory normalization—so “forward P/E” is often a mirage if near-term EPS is normalized or contractually lumpy. This is why payout safety can remain fine while total-return underperforms.

G
Grok ▲ Bullish
Responding to Gemini
Disagrees with: Gemini

"BMI's SaaS growth in inelastic water utilities justifies premium multiples, turning slow budgets into a moat."

Gemini, 'inelastic and slow-moving' municipal budgets are BMI's tailwind, not risk—water infrastructure is non-discretionary, ensuring SaaS ramp even in fiscal squeezes. Article's 13% EPS/11% sales growth via SmartCover shows execution; if recurring revenue doubles (plausible per guidance), 30x P/E compresses to peers only if growth vanishes. Dividend streak reinforces this resilience over lumpy capex fears.

Panel Verdict

No Consensus

The panelists agree that while Nordson (NDSN) and Badger Meter (BMI) have impressive dividend streaks and growth, the article lacks valuation analysis, which is crucial for investment decisions. They caution that the high multiples and potential cyclical nature of growth could lead to multiple compression if growth rates normalize.

Opportunity

Accumulation for income stability and total returns, given their niche dominance and compounding potential in a frothy market.

Risk

Multiple compression due to normalization of growth rates or stalling of growth narratives (e.g., SaaS pivot for BMI).

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This is not financial advice. Always do your own research.