Almost everyone thinks of a quad-winged flying device with a camera when they hear the word “drone.” However, drone technology has advanced dramatically in recent years, revolutionizing how these machines are used.
Drones have long been utilized by the military for covert missions, but they are now being employed for videography, deliveries, security solutions, and much more.
Drone stocks are surging as the military invests in new drone platforms and the Federal Aviation Administration establishes commercial drone rules, potentially paving the way for drone delivery services. As drones grow more common, the value of the companies that make them is bound to climb.
Drone technology is transforming our lives, and many investors are hoping to profit from this growing trend. So, which Canadian drone stocks are the best to buy?
5 Canadian Drone Stocks You Should Invest In
Here are five drone stocks that have the most promising future for Canadian investors who want to get ahead of the game.
MDA Ltd. (TSX: MDA)
MDA, founded in 1969 and employing over 2,000 people across the country, is Canada’s largest space technology developer and manufacturer. It is a global space industry developer and manufacturer of innovative technology and services, a pioneer in robotics, satellite systems, and geo-intelligence, as well as an international space mission partner.
The first commercial Earth observation satellite launched by Canada was RADARSAT-1. Since its deployment in 2007, RADARSAT-2 has produced about 75,000 photos each year. The RADARSAT Constellation Mission was launched in 2019 and uses a three-satellite configuration to provide all-weather coverage.
MDA supported 90 US Space Shuttle missions with the first Canadarm, and Canadarm2 had been working on space station robotic assembly and maintenance for the past 20 years. Now, MDA Ltd. announced that the Canadian Space Agency (CSA) has awarded it $269 million for the next phase of the Canadarm3 program.
Trading at $9.80 as of March 16, 2022 (3:32 AM), this stock is expected to see a boom this year. A market capitalization of 1,163,177,916 and a healthy sales volume of 191,913 speak for the success of this stock.
Drone Delivery Canada Corp (TSXV: FLT)
Drone Delivery Canada Corp is a technological development firm. Its goal is to create, test, and deploy a commercially viable drone delivery logistics platform in Canada. The firm develops drone technology to provide just-in-time delivery services to shops, service companies, and government agencies. It offers a few service alternatives, including Depot to Depot, which focuses on rural applications and provides services from warehouse to warehouse, and Depot to Consumer, which provides logistics services from a store and warehouse straight to a consumer’s home or company.
Drone Delivery Canada Corp and Nexaya Canada, a manufacturer of industrial equipment, will collaborate on sensor-related drone solutions for military projects. Furthermore, under the Canada Transportation Act (CTA) and Air Transport Regulation Canada, the Canadian drone delivery company has received its domestic cargo authorization. Within the DSV Air & Sea Inc. Canada intra-site drone delivery route, Drone Delivery Canada Corp. has successfully conducted dangerous goods transportation. This route will allow DG consumer products to be delivered from the DroneSpots at DSV’s Milton, Ontario facility.
Trading at $0.63 as of March 16, 2022 (3:48 AM), this stock has massive growth potential. Despite its status as a penny stock, analysts believe that the continued development of aerospace and drone projects will serve as a stimulus for its growth.
AeroVironment Inc (NASDAQ: AVAV)
AeroVironment Inc is organized into a single business division that provides unmanned aircraft systems, tactical missile systems, high-altitude pseudo-satellites, and other related services to government organizations within the US Department of Defense as well as allied international governments. The devices can assist with security, surveillance, or sensing, and can operate as “eyes in the sky” without the need for a human pilot.
On Jan. 27, 2022, AeroVironment, Inc. was awarded an $8,541,428 firm-fixed-price contract by the United States Department of Defense Foreign Military Sales (FMS) to provide Puma™ 3 AE small unmanned aircraft systems (UAS), initial spares packages, training, and support to an allied nation.
Revenue for the third quarter of fiscal 2022 was $90.1 million, up 14% from $78.8 million in the third quarter of fiscal 2021. Non-GAAP earnings per diluted share for the third quarter of fiscal 2022 was $0.32, compared to $0.14 in the third quarter of fiscal 2021.
Trading at $74.22 as of March 16, 2022 (4:08 AM), it is a promising drone stock for Canadians. Furthermore, a market capitalization of 1,849,141,796 and a trading volume of 87,921 reflect that the company is dynamically involved in the market.
Northrop Grumman Corporation (NASDAQ: NOC)
Northrop Grumman Corporation is a defense contractor with a diverse portfolio of short-cycle and long-cycle operations. Aeronautics, mission systems, defense services, and space systems are among the company’s segments.
The aerospace division of the corporation manufactures the fuselage for the massive F-35 program as well as a variety of manned and unmanned flying systems. Mission Systems develops a wide range of sensors and processors for military hardware. A long-range missile maker and a defense IT service provider make up the defense systems segment. Finally, the space systems division of the corporation creates numerous space structures, sensors, and satellites.
The total sales for FY 2021 were $35.7 billion in 2021 (organic sales of $8.6 billion in Q4 2021), while the Q4 earnings per share were $17.14. Northrop Grumman will pay a quarterly dividend of US$ 1.57 per share in 2022. In 2021, $4.7 billion was returned to shareholders in the form of dividends and share repurchases. The company generated $3.6 billion in cash from operations in 2021; $3.1 billion in transaction-adjusted free cash flow in 2021.
Trading at $447.90 as of March 16, 2022 (4:46 AM), the company holds a market capitalization of 69,918,056,239. The present EPS of 43.47 and P/E ratio of 10.20 are sufficient to suggest that the firm will have substantial growth this year, with investors profiting handsomely.
EHang Holdings Ltd. (NASDAQ:EH)
EHang is a premier technology platform for autonomous aerial vehicles (AAVs). EHang aspires to provide everyone with safe, self-driving, and environmentally responsible air travel. EHang has a diverse customer base, and it serves them with commercial solutions such as air mobility, which includes passenger transportation and cargo, smart city management, and aerial media solutions. EHang’s objective is to continue to improve people’s lives through innovative technological solutions.
Ehang is rated as a very good long-term investment, with a projected growth of 350 percent over the next five years. The gross margin was 61.8 percent, which was down 6.2 percentage points from the second quarter of 2021, owing to changes in the revenue mix. Total sales for the second quarter of 2021 was RMB13.0 million (US$2.0 million), up 6.6 percent from RMB12.2 million in the previous quarter. Until now, approximately 2,800 operational trial flights of the EHang 216 have been completed under the 100 Air Mobility Routes Initiative at seven different locations.
Trading at $8.60 as of March 16, 2022 (5:06 AM), this stock is a good option for Canadian investors looking to invest in stocks with promising returns. The market capitalization of 476,689,684, together with the trade volume of 426,074, is unquestionably a safe option.
Why You Should Invest in Drone Stocks in Canada
When you reach that point in your life when investing appears to be a viable option, you don’t want to bet on the wrong horse. While there are many stories about the hopeful upturn for drones in recent years, the current stats and expected outcomes are possibly the only facts that you actually need to know. According to Fortune, the present drone market is worth just over 90 billion dollars, but it is anticipated to quadruple to 350 billion dollars by 2025. While this is impressive in and of itself, it is also dispersed over several areas of focus, as not all drone manufacturers cater to commercial and recreational sectors, let alone military uses.
Companies and industries all around the world are beginning to understand the advantages of using drones for a variety of tasks. Anything that reduces the cost of production or speeds up a process results in increased earnings for the company. As a result, it stands to reason that many of the world’s largest corporations will adopt drone deployment in the coming years.
Recreational drone usage and competitive racing drones are also slowly but surely adding to the drone market.
On the other hand, the military is already using drone technology in a variety of ways. It is expected that spending will rise in the coming years, allowing for more drone-specific military applications. This, of course, necessitates the purchase of a large number of drones each year, as well as even more replacement parts for aging drones or machines that have crashed in the field or during training exercises.
Drones are powered by lithium polymer batteries, we have written an article about lithium stocks you can read here.
The Bottom Line
Due to evolving technology in the defence business and rising internet delivery demands in the consumer market, drone and unmanned aerial vehicle (UAV) research and development are fast progressing. Such factors could help the sector grow in the future. As a result, verifying the analysts’ predictions of a highly prosperous industry.
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Best Canadian Drone Stocks
This year, Google Alphabet (project wing) parent company Alphabet (Project Wing) has held several press-friendly events, including delivering cookies for girls in Virginia to the drone community last year and developing partnerships with Finland and Australia. Lockheed announced in May 2020 a partnership with the Air Force Test and Pilot School, the company’s skunk factory division, to strengthen the Air Force’s drone technology and AI. In addition, Kratos and Boeing are helping General Atomics develop a prototype for the Air Force’s Skyborg autonomous drone program.
Percepto offers market-leading autonomous drone solutions for critical infrastructure and industrial applications. Kratos Defense & Security Solutions (KTOS) shaped the drone scene with a major deal with the Air Force in 2019.
The market-leading autonomous drone solution for critical infrastructure and industrial applications allows continuous monitoring, digitization and plant safety for industrial locations worldwide. Drone Delivery Canada is a pioneering technology company focused on designing, developing, and implementing commercially viable drone logistics systems.
Drone Delivery Canada will redefine traditional logistics systems with the introduction of drone technology. The company strives to be the leading drone delivery company on an international level. Its technology is intended for government and commercial use for industrial and retail customers around the world.
Much remains open in the air when it comes to the commercialization of drones, but with more and more players buzzing the market, it is a difficult decision for investors who want to expose themselves to space. Drone inventories are on the rise as the military invests in new drone platforms and the FAA sets up rules for commercial drones – opening up opportunities for drone delivery services. As of June 2021, the industry’s top drone stocks are defence and trading assets based on IBD’s composite rating and market cap.
Drone Delivery Canada, a drone logistics company, has seen its share price soar this year, jumping from under $100 to more than $220 in early February. As well, Canadian Loop Insights and Greenlane Renewables are among the most active stocks on the TSXV.
Specifically, we think that its Cash runway does not stand out as evidence that the company is above its spending levels. On the other hand, loop Insights “cash holdings are great, with zero debt on the balance sheet from September 2020. Moreover, given that only 44% of CA’s $273 million’s market capitalization is a small percentage, it should be easy for Drone Delivery Canada to finance years of growth without issuing new shares to investors or borrowing.
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Flir is a company providing innovative sensor solutions for the everyday life of drones, including thermal imaging systems, visible-light imaging systems, positioning systems, measurement and diagnostic systems and advanced thermal detection systems. Workswell develops advanced thermal imaging systems for commercial unmanned aerial vehicles. The Workswell WIRIS 2nd Gen Thermal Imaging System enables real-time sensor control with standard RC radio transmitters to communicate with drones.
Kespry manufactures drones designed to capture, view and analyze aerial imagery and surveying data. Its customers include mining, construction and surveying companies. Depot – The company focuses on rural applications and provides warehouse-to-warehouse services.
They provide the indicators, tools and strategies needed to implement solutions with drones. Ageagle Aerial Systems Inc. offers people like you and me the benefits of drone solutions in everyday life.