Water is a precious resource that's essential for life. Since the early 1900s, Badger Meter (BMI +0.25%) has been involved in helping utilities and their customers monitor and manage their water use. Historically, that was a largely industrial business, but steady innovation has turned Badger into a budding water-technology leader.
Earlier in this series of articles, I discussed how Badger Meter got to where it is today and how it's turning its cutting-edge technology into growing sales and profits. Today, this series closes on the question of where Badger will get future growth and what expectations shareholders should have for the company going forward as it takes its place as the third stock in the new Voyager Portfolio.
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Badger has multiple pathways to growth
Badger has already established itself as the early leader in the North American smart-water technology market. Yet the company still has a long way to go before it migrates its entire client base to its latest product and service offerings. Badger estimates that only 40% of its connection points have switched to advanced metering infrastructure (AMI). As more customers move through the natural replacement cycle for their metering and monitoring equipment, Badger expects that it will persuade most of them to upgrade to AMI.
New capabilities in Badger's platform should also encourage greater adoption. Real-time water quality monitoring, high-frequency pressure and network monitoring, and other indicators of system health have considerable value for utility users. Ongoing software upgrades also represent chances to connect more fully with clients, and Badger hopes to take its expertise overseas to serve areas like Europe and the Middle East with customized solutions that fit market needs.
Flow instrumentation is a niche that Badger has looked to capture as well. With potential uses in smart-building applications, climate control equipment, and wastewater treatment facilities, Badger anticipates that its ability to help clients monitor water quality both coming into industrial facilities and when water gets discharged at the end of an industrial process will open new doors both at home and abroad.
NYSE: BMI
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The role of M&A in Badger's growth plans
Badger has routinely used strategic acquisitions to expand its product offerings and boost its growt rates. By far its largest purchase came in early 2025, when it acquired water collection monitoring system provider SmartCover for $185 million. SmartCover maintains sensors on sewer manholes and lift stations to monitor sewer inflow, infiltration detection, and even odor to provide data that allows users to anticipate problems before they occur.
With the purchase, Badger will expand its client base to include more dedicated wastewater treatment businesses. It will also strengthen ties to existing customers that have both water and wastewater operations, and access to SmartCover's client base is already creating cross-selling opportunities to boost both businesses.
Why the Voyager Portfolio is investing in Badger Meter
The Voyager Portfolio has a long-term mindset, and I'm intrigued by investments whose bull cases will take years or even decades to play out fully. Badger is such an investment.
To date, few investors in the developed world have taken threats to global water supplies very seriously. However, with a growing population and ever-greater water-use needs, many areas around the world are already feeling the impact of limited water supplies. From a sustainability standpoint, Badger is well-placed to help businesses of all kinds make more efficient use of their water as costs inevitably rise.
I also like companies that have embraced dividend investors, and Badger fits the bill. The company's 18% dividend hike in August 2025 marked the 33rd straight year of annual increases. That puts Badger in elite territory, and despite a modest yield of less than 1%, the company has plenty of potential to keep raising its payout in future years.
Therefore, the Voyager Portfolio will invest in Badger Meter shares as soon as disclosure and trading restrictions allow. Over time, I expect to raise a glass to the water stock's good fortune many times in the years to come.
