The recent space venture of Jeff Bezos and Richard Branson created a lot of buzz in the Canadian stock market. With many experts calling this first-of-its-kind venture the pioneer of commercial spaceflights, the space stocks in NASDAQ soon sky-rocketed. The majority of these stocks have since come down. However, stock analysts predict that these space stocks won’t stay down for long. If you have been thinking about investing in this high-potential industry, there has never been a better time.
5 Canadian Space Stocks You Should Invest In
The Canadian Space Sector is home to more than nine space companies and over 200 organizations, all of which excel in this field with cutting-edge technology. However, these are not the only space stocks you can invest in. The red-hot space stocks in Canada include those which operate as a secondary in Canada while having their stronghold in the US. Here is a list of 5 space stocks with TSX listing showing a promising growth rate.
MDA Ltd. (TSX: MDA)
Once a rocket has surpassed Earth’s premises, much technical expertise goes into its maintenance and upkeep. MDA Ltd. is a Brampton, Ontario-based company specializing in manufacturing satellite constellations. In addition, this company has been instrumental in the robotic assembly systems of US space stations that conduct scientific research in space. It has proven to be one of the best companies in the space business, with a knack for rapid innovation.
Initially considered a miss when its IPO went public, MDA Ltd. soon catapulted to a prominent position in the stock market. This space company, formerly known as MacDonald, Dettwiler, and Associates, raised 400 million Canadian dollars when it first went public. However, after a large chunk went into the debt payments, the company decided to invest the rest of its capital in the R&D department. This decision seems to be paying off. Recently, MDA Ltd. landed a government contract to design an AI-Powered Canadarm3 worth $35.3 million.
All of these factors make it a promising space stock worth investing in. Currently, trading at 16.02 CAD at 6:05 am (PDT), this stock has massive potential to grow, and it will prove to be a good investment.
MDA Ltd. is actively looking for ongoing growth initiatives. This is a good sign for its stock price in the future when commercial space flights will be much more common. Moreover, with a debt/equity ratio of 117.22, it is a lower-risk investment than its competitors.
Maxar Technologies Inc (TSX: MAXR)
After crashing 24% in May 2021, Maxar Technologies showed its mettle by undertaking a steady recovery. They quickly recovered after selling off a few assets and are now highly sought-after in the Canadian stock market. Trading at $38.85 at 7:54 am (PDT), this stock has always been considered a safe investment by stock traders.
Maxar Tech is a renowned innovator in aerospace infrastructure and is famous for its state-of-the-art satellite systems. This company was the sole owner of MDA limited until April when it decided to sell MDA for a hefty sum of 1 billion CAD. Space exploration company Maxar boasts several advanced products such as a geospatial imaging satellite business and broadband services. In addition, it has created a network of communication between the infrastructure in space and the monitoring stations on Earth. Maxar has decades of experience manufacturing communication satellites that include the world-famous 1300-class platform.
Several industries such as Defence, Intelligence, and Earth Observation rely on Maxar Tech for commercial geospatial intelligence. The authentic data analytics provided by Maxar Tech has always been a subject of interest among engineers. Using the tools and services offered by Maxar, data scientists and analysts can pinpoint any suspicious activity taking place in their territory.
The high Price-to-Earnings ratio is a testament to the growing interest in this space stock. Although TSX shows random fluctuations in its stock price, rest assured that it won’t be a bad investment.
The Boeing Company (BA:US)
With the rapidly plummeting stocks of Virgin Galactic Holdings Inc, stock investors have turned to the evergreen Boeing Company.
The stock prices of Boeing peaked in late-2018, a time at which they were considered the most in-demand stocks in the airline industry. However, two back-to-back crashes of Boeing’s flagship airliner sent its stocks into a downward spiral. The aftershocks of this accident were seen for the next two years when the company agreed to a hefty settlement fee, and the covid-19 pandemic caused the aerospace industry to go into a multi-billion dollar deficit.
Despite all of this, the space stocks of Boeing have made a significant comeback. The grounded Boeing 737 Max is back to flying hundreds of passengers after passing rigorous security checks. This news has positively affected the stock prices of Boeing company, which now has more than $25 billion in assets.
Although Boeing is primarily a commercial airlines company, its space ventures have caught the eye of various investors. Boeing is enabling the research projects on International Space Station using its technology and expertise in the space industry. Currently trading at the cost of $236.69 at 10:05 am (PDT), you won’t regret investing in this stock. Right now, the TSX shows a negative Price-to-Earnings ratio for this stock, making this an ideal time to invest for a high return in the future.
Magellan Aerospace Inc. (TSX: MAL)
The space industry is not all about launching rockets and space shuttles; it is a diverse sector that requires the collaboration of several sectors to function optimally. Magellan Aerospace is the premier aerospace company based in Canada that aids engine manufacturing with complex assemblies. Magellan is known for its advanced product manufacturing capabilities offered to military and civilian companies. In addition, this Canadian space technology firm manufactures space robotics and sensors for space missions and is reportedly working on a platform for vessel detection.
The company currently has a market cap of $586 million. Its massive clientele includes the likes of Boeings and Airbus. The share volume of this company is 1500 at the moment and is likely to increase soon. Like all other aerospace industries, this company also faced a massive depreciation during the peak of covid-19; it was at its lowest in December 2020.
However, despite the challenges, Magellan has shown incredible recovery potential. The stock has gained about 16% within the last year. This guarantees a promising future for Magellan Aerospace.
Raytheon Technologies (RTX: US)
Raytheon Technologies is an American-based aerospace company under the ticker symbol RTX specializing in innovative aerospace equipment. This includes high-tech gadgets such as avionics, aerospace engines, and guided missiles. Raytheon is one of the pioneering companies that shaped the aerospace industry around the globe.
It boasts a long-lasting partnership with the US Department of Defense. Approximately 90% of all US space shuttle missions went into deep space with the support of Raytheon technology.
Raytheon Tech traces its origins back to 1922. It played an instrumental part in the Apollo missions of NASA. One of the most incredible accomplishments of this company is the manufacturing of the Apollo Guidance Computer, which played a vital role in the navigation and control of the spacecraft.
With a positive Price-to-Earnings ratio of 55.6 and a decent-looking dividend yield of 2.31%, this space stock is showing promising signs. The second-quarter earnings have been encouraging, and the company looks set to achieve its goals of 2025, making it an ideal stock to invest in.
Why Choose Space Stocks in Canada?
At this moment, Canadian space stocks are at an all-time high. As a result, stock analysts are looking to invest in growth stocks, and witnessing the current trajectory, investing in these private companies is a good bet. In addition, the growing public interest in popular space companies has prompted Morgan Stanley to call it a trillion-dollar industry.
This space race has given rise to numerous private companies, the most notable one being SpaceX by Elon Musk. These companies strive to launch commercial space flights in the depths of space. Along with this, they also aid the government agencies using observation satellites and satellite imagery analysis.
You might think that space companies are only tasked with launching rockets, but that’s not it. There is much more to it than meets the eye. The majority of these space companies, determined to put humans on spaceflights, are, in fact, defence conglomerates. They dedicate a large chunk of their revenue to making a human intervention in space possible with the help of any significant innovation.
Investment potential in the space industry is not only limited to stocks. Space exploration ETFs have also shown promising growth potential and are more in demand since they are safer than stocks.
The majority of Canadian space companies generate revenue from both commercial and defence industries, so the chances of their stocks going down are minimal. Moreover, along with American space stocks, Canadian space stocks are predicted to reach new milestones as soon as the recent economic recession subsides.
Outer space will see around 50,000 new satellites by 2030. With the rapid advancements in the space industry, the interest in flights for space tourists is taking off.
Canadian Space Stocks
While the market has differentiated Virgin Galactic’s “business model in the race to colonize Mars, Bezos and Musk’s primary goal is not to offer Virgin Galactic on its merits but to build a heat shield around stock returns to Earth to the Wall Street Betting and Trading Mob. They are betting that Jeff Bezos’s Blue Origin and Elon Musk’s Space X will offer more of a real space journey, leaving Virgin Galactic investors clutching at space dust.
Allocation of Space Stocks Much of our research into the strategic space value chain focuses on publicly traded space companies with significant niche and technology advantages in the space sector. We monitor and invest in these aerospace companies that manufacture and operate satellites, robotics, artificial intelligence, data communications and the production of space-hardened equipment. An ideal tech stock is part of an expanding addressable market that quickly increases maximum profitability.
In 2019, we looked at Maxar Technology, a diversified space company that makes satellites, satellite components, robotics and space imaging. Maxar Technologies is a space technology company based in Westminster, Colorado, the USA specializing in manufacturing communication, earth observation, radar and on-orbit services for satellite and satellite products and related services. One of the biggest problems is that the company is burdened with billions in debt, expensive acquisitions, and an ambition to build a new fleet of imaging satellites.
Despite the enormous expectations of launching commercial suborbital spaceflights into space, the company suffered several technical problems in the coming years, which repeatedly delayed its maiden flight. As a result, after soaring 62% in early February, the company’s shares have been hurled into 2020 with alarming headlines and repeated launch delays.
MDA is a Canadian space technology company that merged into Maxar Technologies and then sold to create its own business. Following the completion of its initial public offering, MDA is now a publicly-traded company. Canadian space technology company MDA Ltd. raised $400 million (320 million euros) in its first public offering, 20 percent below its target, and sold shares for less than expected.
The legendary Canadian space company wants to raise $500 million for its stock market return. In a regulatory filing on Monday, MDA Ltd. is attempting to sell 25 million to 31.25 million shares in an initial public offering in Canada at $16 to $20. The Company plans to list on the Toronto Stock Exchange under the ticker symbol MDA.
Later in this article, we will focus on the value proposition of the combined company. Virgin Galactics (SPCE), the sister company of Virgin Orbit, is a publicly-traded stock considered a blank cheque for the merger. In addition, space Go Public Holicity (HOL) and Momentus went public, while Stable Road Capital (SRAC) and Vector Acquisition (VACQ) listed Rocket Lab in a deal valued at $4.1 billion.
The legacy of the space industry is Boeing (BA) building its space taxis and powerful rockets. However, to return astronauts to the moon and Mars, NASA works with other established space companies such as Lockheed Martin (LMT) and emerging space companies.
With the purchase of rocket manufacturer Orbital ATK in 2018, Northrop Grumman (NOC) expanded its scope to become one of the leading space shares. The company working on the Omega heavy rocket received funding from the Air Force last year to end US dependence on the Russian engines of ULA’s Atlas 5 rocket.
In addition, this year, several high-end space companies and special-purpose acquisitions companies have gone public, including Rocket Lab, which makes one of the best-looking rockets ever made. Virgin Galactic Holdings (NASDAQ: SPCE) – Stock One of the most popular space companies is SpaceX. The company plans to conduct suborbital space flights for space tourists.
After a decade of observing space stocks, Morgan Stanley has monitored and selected space-related stocks since 2009. We currently monitor over 50 space stocks included in our portfolio of space investments. In addition, we’ve listed our ideas for 20 space stocks that could lead to a trillion-dollar market.
We invested in a space stock in our Disruptive Tech Portfolio Report available to Annual subscribers, Spire Global, which recently completed its reverse merger with Navsight Holdings (NSH). Regular readers will know that we avoid SPACs because retail investors often lose out. Many listed companies trade and are analyzed by reliable, independent brokers.
Neo List is a progressive stock exchange that brings investors and capital providers together in a fair, efficient and service-oriented environment. It hosts over 120 corporate and ETF listings and accounts for over 20% of the volume traded in Canadian ETFs.
NEO List, active since June 2015, puts investors first by providing access to trading in Canadian listed securities on a level playing field. It lists risk-free companies and investment products on the most sought-after exchanges, enabling investors to trust in quality, liquidity and broad knowledge, including unabated access to market data. The NEO exchange in the US is an obvious choice for listing new funds.
The COVID-19 pandemic acted as a tailwind for e-commerce companies, including Shopify, Canada’s second-largest company in market capitalization. It helped the company increase its lead position by 86% compared to the previous year in 2020. As a result, Shopify shares, which went public in 2015, have returned 49.20%.
As the company continues to reinvest and streamline its supply chain to expand its customer and dealer base, investors expect Shopify’s “share price to outperform the larger market.