The universe is full of mysteries, but these three stocks are sure to bring you great things and great profits.
Space sector stocks offer exciting diversity. Technology is one of the most important parts of the space industry, and the desire to explore and discover space is driving technological innovation to new heights. As technology develops, the potential of space will be unlocked bit by bit, and it may eventually grow into one of the largest markets in history.
Those who want to invest in space stocks must be able to tolerate some risk. There is little room for failure in developing space technology and a lot of room for expensive research and development costs. But if you can stomach the risk, these three stocks are perfect choices for investors given their incredible potential and favorable position in the space market.
Let’s take a closer look at what each company has to offer and why they’re in an attractive position for rapid growth over the coming years.
Lockheed Martin (LMT)
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Lockheed Martin (NYSE:LMT) is the world’s largest defense technology company. Its main customers include the Department of Defense and other government agencies. However, Lockheed also has a significant presence in the space market, supplying satellites, missiles, and launch technology to customers such as NASA.
Lockheed’s launch business is driven by a major partnership with Boeing (NYSE:BA) that began in 2006. The two companies have faced surging demand from government backers such as the Air Force to launch more satellites to keep up with arch rival SpaceX and give the government precise testing of the latest defense technologies.
But demand isn’t just limited to the company’s launch technology. The company has a long history of developing cutting-edge missile technology. The U.S. military is also pouring money into Lockheed to buy the company’s most advanced missile system, the Hypersonic Weapons System, which helped secure a $756 million contract for the technology last month.
Lockheed continues to expand these areas of success, with space technologies accounting for 19% of first quarter net sales and missiles accounting for approximately 17%. With increasing investment from government agencies and continued success with commercial customers, Lockheed is poised to hit the big time. This is a great investment for anyone looking to get into space this year.
Leidos Holdings (LDOS)
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Leidos Holdings (NYSE:LDOS) is unique in the space market in that in addition to technology, it offers a wide range of consulting services, primarily to NASA and other government agencies with deep space interests.
While Leidos’ products span a wide range of markets, the company’s space services include technology, education, cargo, human exploration and payload delivery missions. The company has a long history of collaboration with NASA and is the primary technical services provider on countless ongoing missions.
The company has also made smart investments to expand its space capabilities, including acquiring Dynetics, a leading research and security solutions company, in 2020. Dynetics now operates as a subsidiary of Leidos and continues to provide cutting-edge technology to the government.
Leidos is a relatively stable stock in the space sector. It has already seen strong growth this year, with its stock price reaching an all-time high. Investors should keep an eye on Leidos as it continues to prove its undeniable value and return potential.
Rocket Lab USA (RKLB)
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Rocket Lab USA (NASDAQ:RKLB) is less established than some of the other companies on this list and is still new to the space tech market. While the market already carries high risks, Rocket Lab also faces the risk of being a startup company without many established customers.
But there’s a lot to be said about this launch and rocket technology specialist, which has already established a strong foothold in smaller launches and is hoping to expand its offerings to larger rockets and satellites.
The point is, smaller doesn’t mean less profit: In April, the U.S. Space Command awarded Rocket Lab a $14.49 million contract to launch a small Electron mission. But Rocket Lab’s business goes beyond launch technology.
On June 11, Rocket Lab announced it planned to enter into a non-binding agreement to receive $23.9 million in direct funding to increase production of semiconductors used in satellites and other spacecraft.
The funding comes from the CHIPS and SCIENCE Act, and Rocket Lab was selected for the grant due to its acquisition of semiconductor manufacturer SolAero Technologies in 2022. This young space stock is far from its peak but has the potential to have a major impact on the space industry.
As of the date of publication, Joel Lim did not hold (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the author and are subject to InvestorPlace.com’s publication guidelines.
Joel Lim is a contributor to InvestorPlace.com and a financial content contractor who creates content for several companies, including LTSE and Realtor, as well as financial publications such as Business Insider, Yahoo Finance, Mises Institution and the Foundation for Economic Education.
