Bob And Doug Go to Space!

For the first time in almost a decade America has sent astronauts into space without having to pay for a seat on a Russian rocket. SpaceX is officially the first private company to ever send people into space giving them a serious leg up on major competitor Boeing who has not been approved to send up a manned craft as of yet.

Right off the bat let me say that SpaceX is NOT a part of Tesla (TSLA. NASDAQ $898.10) (I will probably talk about them in a later article) as most people seem to think it is. The only thing they share is a CEO and the occasional mutually beneficial product purchase, because why wouldn’t you if you ran both companies? Unfortunately you are unable to buy SpaceX shares on any exchange as they are private and not publicly traded. You can however buy shares of their competitor Boeing (BA. NYSE $151.39) or some of the other companies that compete with them for space related projects.

SpaceX is also planning a public offering of their Starlink Satellite run high speed internet. While it is not a guaranteed IPO it may be one of the few ways the average person can get in on the space race. A few of the other companies involved in space related activities currently are Lockheed Martin (LMT. NYSE $388.96), Spirit Aerosystems holdings (SPR. NYSE $23.79), Aerojet Rocketdyne Holdings (AJRD. NYSE $43.65), Virgin Galactic Holdings (SPCE: NYSE $15.77) and Maxar Technologies Inc. (MAXR. TSX $22.42, they are also listed on the NYSE).

Boeing, obviously this company doesn’t need much of an introduction. They make every type of aircraft you can think of from commercial airlines to fighter jets to unmanned drones to spacecraft. They also build weapons, mostly the type shot or dropped from planes and boats, not so much smaller munitions. They also received a contract in competition with SpaceX to build manned aircraft to send up astronauts for NASA. Market Cap 85.43Billion. 52 week Range $89-$391. EPS -6.0496. P/E N/A. Obviously earnings are not good and will remain that way for a bit due to Covid-19 and the 737 Max grounding. If you can tolerate some risk they could be a good buy in the next year or so.

Lockheed Martin, these guys have their hands in pretty much everything defense related from planes to destroyers as well as weaponry, cyber defense programs and space programs. Also radar and unmanned aircraft. They compete with Boeing and numerous other companies for defense contracts from Britain, the USA and many other countries worldwide. Market Cap 112.91 Billion. 52 week range $266.11-$442.53. EPS $21.03. P/E 18.28. Their P/E Ratio is pretty average for their industry showing they are probably not under priced currently. They do have one of the highest dividends of the aerospace and defense companies though at 2.32%.

Spirit Aerosystems, these guys build aerospace parts and equipment as well as repair and overhaul of parts and equipment. One of their biggest customers at this point is Boeing so the 737 Max groundings are really hurting them right now as well. Market Cap 2.96 Billion. 52 week range $13.69-$92.81. EPS $1.93. P/E 14.51. Their P/E Ratio is on the lower side for the aerospace industry but that is probably due to the price drop due to their dependence on Boeing. It could be a good buy due to this. They also have a high dividend yield for an aerospace company at 1.61%.

Aerojet Rocketdyne Holdings, these guys are an aerospace (mainly propulsion related systems and spacecraft) , defense (mostly missiles and missile defense components) and real estate company (12200 acres in Sacramento California). Market Cap 3.51 Billion. 52 week range $34.01-$57.27. EPS $1.60. P/E 27.92. Their P/E ratio is on the higher end showing the may potentially be overvalued and they don’t pay a dividend. They would require more in depth research before buying to make sure they are growing fast enough to be worth the high P/E ratio.

Virgin Galactic Holdings, these guys largely do space flight for private individuals and researchers. They build spacecraft as well as commercially selling rides marketing themselves as the worlds first Spaceline. Market cap 3.32 Billion, 52 week range $6.90-$42.49, EPS $-1.08, P/E Ratio -11.39. This is one of many recently listed companies that are not profitable yet (and possibly may never be). If you are going to invest in this stock you need to be very risk tolerant as it will probably be volatile and risky for quite a while.

MAXAR Technologies, these guys make satellites, satellite repair platforms as well as manned platforms. They also build space exploration equipment and satellite imaging mapping and analytics. Market cap 1.37 Billion. 52 week range $7.7-$27.98. EPS $1.736. P/E 13.13. They have the lowest P/E ratio of all of the companies I have listed which shows they may be undervalued at the moment. They also have the lowest market cap which also shows they are the smallest and potentially more risky than the other companies as a result. The biggest upside for me with this company is that they are the only one listed on a Canadian exchange, therefore you can avoid the currency conversion fees when buying and selling them (These are usually in the range of about 1% when you buy and the same again when you sell). They also have a dividend yield of 0.30%. If you are buying in a TFSA this is also an advantage because you won’t have to pay the 15% tax on the dividends like you would on a U.S. listed company.

The 2 stocks I would be most likely to look at currently out of this group, excluding Boeing since I am already long on them, would be Maxar and Spirit Aerosystems. They both have low P/E ratios meaning the could potentially be under priced (5-15 is generally considered a low P/E ratio with a few exceptions). They both also pay a dividend which I also like when looking at a stock. Passive income while holding a stock is never bad, especially if you reinvest it all.

These are just a few of the aerospace companies you could look into if you wanted to invest in this sector. Webull has 55 companies listed in the aerospace and defense sector. If you are willing to do some research there are definitely a few stocks in this sector that will outperform the market going forward.

Disclaimer: I am long on Boeing but do not hold any positions in any other stock I talk about in this article and do not intend to open a position in any of these companies in the near future.

All stock prices, market caps and ratios are as of writing and may have changed since then.

Published by Colby McTavish

I am a second year Heavy Equipment Technician. I also have a diploma in business management from MacEwan university. I have 2 children. In my spare time I race stock cars, play ball hockey, trade stocks and work on vehicles when I am not hanging out with my kids and my other half (who promptly notified me she was unimpressed to not be in the original version)

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out /  Change )

Google photo

You are commenting using your Google account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s

%d bloggers like this: