How Badger Meter Plans to Dominate the Smart-Water Market Through 2026

The Water Crisis Is Creating Urgency in the Industry

Water scarcity is becoming one of the most pressing challenges globally. As populations grow and industrial demand surges, traditional water management infrastructure is showing its limitations. This backdrop sets the stage for companies like Badger Meter (NYSE: BMI) to reshape how utilities and businesses monitor and control their water usage. Since its founding in the early 1900s, the company has evolved from a simple metering provider into a cutting-edge smart-water technology innovator—and now it’s positioned to capture massive market share as the industry undergoes digital transformation.

The real opportunity lies in what industry experts call the advanced metering infrastructure (AMI) revolution. Currently, only 40% of Badger’s customer connection points have transitioned to these newer, smarter systems. That means 60% of existing clients still rely on legacy equipment—and that’s where the growth comes in.

The Product Revolution: From Legacy to Smart Metering Solutions

Badger’s core value proposition centers on replacing outdated water meters with intelligent systems that deliver real-time insights. The shift from traditional mechanical meters to digital, IoT-enabled meter infrastructure represents far more than just a technological upgrade—it fundamentally changes how utilities operate.

The company’s smart-water platform now includes capabilities that go well beyond simple consumption tracking. Real-time water quality monitoring, high-frequency pressure sensing, and network health diagnostics give utility operators unprecedented visibility into their systems. These advanced features create significant value for customers, making the business case for upgrading their meter infrastructure increasingly compelling.

Beyond traditional water utilities, Badger has identified flow instrumentation as an emerging growth vector. This technology finds applications in smart buildings, climate control systems, and wastewater treatment facilities—sectors that are hungry for better data to optimize operations and reduce waste.

Geographic Expansion and International Opportunities

Domestically, Badger remains focused on converting its North American customer base through natural equipment replacement cycles. But the company’s ambitions extend far beyond the U.S. and Canada.

Europe and the Middle East represent largely untapped markets where Badger can deploy customized smart-water solutions tailored to regional regulations and infrastructure needs. As water stress becomes a global phenomenon, international expansion could eventually contribute as much revenue as domestic operations. The company is strategically positioning itself to capture this wave before competitors fully mobilize.

Strategic Acquisitions: The SmartCover Play and Beyond

Badger has demonstrated a disciplined approach to M&A, using strategic acquisitions to accelerate growth and expand its addressable market. The most significant recent deal came in early 2025 when Badger acquired SmartCover for $185 million.

SmartCover specializes in sewer collection monitoring systems, deploying sensors on wastewater infrastructure to detect infiltration, prevent system failures, and even monitor odor levels. This acquisition serves multiple strategic purposes:

• Market expansion: Badger now penetrates wastewater treatment businesses that were previously outside its core customer base
• Cross-selling engine: Existing customers with combined water and wastewater operations become targets for selling both product lines
• Client base growth: SmartCover’s established relationships provide immediate revenue synergies

This M&A strategy suggests Badger will continue looking for bolt-on acquisitions that enhance its product portfolio and accelerate penetration of water infrastructure operators.

The Financial Case: Why Investors Should Pay Attention

Beyond the growth narrative, Badger appeals to a specific type of investor: those seeking reliable dividend income paired with long-term appreciation potential.

In August 2025, Badger announced an 18% dividend increase—marking the company’s 33rd consecutive year of annual dividend growth. This track record places Badger in an elite class of Dividend Aristocrats. While the current yield sits below 1%, the company has demonstrated its capacity to continuously raise payouts as revenues and profits expand.

For long-term investors, this suggests Badger will likely maintain its dividend aristocrat status for decades to come, providing growing income streams alongside potential capital appreciation.

Why the Water Story Matters for Your Portfolio

Most investors haven’t yet internalized the severity of global water challenges. Yet utilities and industrial operators are already grappling with real resource constraints. As water costs inevitably rise and scarcity pressures intensify, companies that help customers use water more efficiently will capture tremendous value.

Badger Meter sits at the intersection of three powerful trends: digital transformation of industrial infrastructure, global water scarcity, and the shift toward sustainability. The company has already established itself as the North American leader in smart-water technology, but the real upside lies in executing its vision across geographies and verticals over the next 5-10 years.

The bull case for Badger is inherently long-term. Full monetization of the company’s opportunity set will likely take years, if not decades. But for investors with patient capital and conviction in structural tailwinds, Badger Meter represents a compelling opportunity to align profits with planetary necessity.