Smart Water Technology's Pivot: How Badger Meter Plans to Capture the Market in 2026

Water scarcity is reshaping how utilities think about resource management. Badger Meter (NYSE: BMI), a company with over a century of history in water monitoring, is executing an ambitious smart plan to evolve from a traditional metering business into a technology-driven leader in the smart-water infrastructure space.

The Conversion Challenge Ahead

Despite establishing early momentum in the North American smart-water technology market, Badger Meter faces a significant untapped opportunity within its own customer base. Current penetration shows that only 40% of connection points have migrated to advanced metering infrastructure (AMI)—leaving substantial room for expansion. The company’s growth strategy hinges on accelerating this migration as aging equipment enters natural replacement cycles.

The smart plan involves bundling new capabilities that create genuine value for utility operators: real-time water quality monitoring, high-frequency pressure tracking, and predictive network health indicators. These aren’t mere feature additions—they represent a shift toward proactive system management rather than reactive problem-solving. Ongoing software iterations provide additional touchpoints to deepen customer relationships while laying groundwork for recurring revenue streams.

Geographic and Sectoral Expansion Pathways

Beyond domestic penetration, Badger is positioning itself to extend smart-water solutions into international markets, particularly Europe and the Middle East. Customized deployments tailored to regional regulatory environments and infrastructure needs could unlock entirely new customer segments.

The company’s ambitions extend beyond traditional water utilities. Flow instrumentation applications—spanning smart buildings, climate control systems, and wastewater treatment facilities—represent an adjacent market where Badger’s monitoring expertise translates directly. The ability to track water inputs and discharge quality positions the company to capture value across multiple industrial verticals.

Strategic Acquisitions Fueling Market Leadership

Mergers and acquisitions form a cornerstone of Badger’s expansion blueprint. The 2025 acquisition of SmartCover for $185 million exemplifies this approach. SmartCover’s sensor network for sewer infrastructure—monitoring inflow, infiltration, and odor detection—expands Badger’s addressable market into dedicated wastewater operators. More strategically, cross-selling opportunities now emerge within existing customers who manage both water and wastewater operations, effectively multiplying the revenue potential from each account.

This M&A-driven diversification compounds the smart plan by broadening both the customer base and the range of problems Badger can solve for any given utility.

Why Investors Are Taking Notice

Badger’s investment thesis extends beyond quarterly returns. With global water stress intensifying, companies enabling efficient resource management are positioned to benefit from both regulatory tailwinds and rising customer demand. Badger’s credentials on this front are solid: the company raised its dividend 18% in August 2025, marking the 33rd consecutive year of annual increases—a distinction placing it among an elite cohort of reliable payers.

Even at a modest yield below 1%, the company’s demonstrated capacity to grow payouts suggests room for future increases as profitability expands. For long-term investors with a multi-year horizon, Badger’s combination of structural tailwinds, technological positioning, and capital return discipline creates a compelling investment profile as it executes its smart plan for capturing market share in the evolving smart-water landscape.