3 Best Drone Stocks to Play UAVs’ Second Act

drone stocks - 3 Best Drone Stocks to Play UAVs’ Second Act

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Drones and unmanned aerial vehicles (UAV) are big business. According to Research and Markets, the global market for UAVs and drones will grow to $58.5 billion by 2026 from $27.2 billion reached in 2020, for a compound annual growth rate (CAGR) of 13.9%.

Drones and UAVs are most often associated with the military and defense. But increasingly, the technology is being used in a number of different sectors ranging from agriculture and urban planning to filmmaking and fisheries management.

Consumers are also using drones and UAVs more, deploying them to film sports and capture memories with families and friends, or flying them for recreation and entertainment.

As these devices become more common place, we look at three drone stocks investors can buy to play UAVs second act.

  • Lockheed Martin (NYSE:LMT)
  • GoPro (NASDAQ:GPRO)
  • Boeing (NYSE:BA)

Best Drone Stocks: Lockheed Martin (LMT)

A Lockheed Martin (LMT) Space Systems sign in Sunnyvale, California.
Source: Ken Wolter / Shutterstock.com

Development of drones and unmanned aerial vehicles is being led by the U.S. military, and Lockheed Martin, the world’s biggest defense contractor with annual revenues in excess of $65 billion, is leading the charge.

The Bethesda, Maryland-based company is developing everything from high-tech drones used to drop bombs on enemy targets, to unmanned gliders used to conduct surveillance and gather intelligence, to an unmanned combat helicopter that can be piloted remotely from the ground.

An integrated defense and technology company, Lockheed Martin is on the cutting edge of drone applications for military use, which is one of the biggest markets for the devices.

LMT stock is a solid investment in good economic times and bad. Case in point, the company’s share price is up 5.04% year-to-date while the benchmark S&P 500 index has fallen 7.41% in the same time period. Over the past 12-months, Lockheed Martin stock has gained 10% to now trade around $374 a share.

GoPro (GPRO)

Source: GoPro

GoPro is arguably best known for the cameras people strap to their helmets when skiing and mountain biking, as well as its video editing software. However, the San Mateo, California-based company also has a line of drones that utilize its cameras to film sports and other activities, and that are popular among hobbyists and adventure sports enthusiasts. GoPro’s “Karma” drone is particularly popular.

GPRO stock has not proven to be as resilient as Lockheed Martin’s. So far in January, GPRO stock has declined more than 15% to now trade at around $8.71 a share. However, the shares still remain up 3% over the past 12 months.

The company has struggled with market saturation of its various cameras, but is pushing ahead with drones and other devices as it looks to grow and diversify its revenue stream.

Best Drone Stocks: Boeing (BA)

BOEING STOCK
Source: Shutterstock

One of only two commercial airplane manufacturers in the world (the other is France’s Airbus SE), Boeing is part of a duopoly. However, Chicago-based Boeing’s business is more diverse than most people realize.

In addition to aircraft, Boeing also manufactures satellites, missiles and, of course drones. In fact, the company has an “autonomous systems” division that focuses on a range of UAVs for both commercial and military use. It has even developed unmanned undersea vehicles for use in the ocean, and another for use in space.

BA stock has experienced a rocky stretch over the past year and is essentially flat for the past 12 months, up a slight 0.27% at its current price level of around $204 a share. The company (and share price) have been recovering after its 737 Max airplanes were grounded worldwide following several high-profile crashes.

With the 737 Max cleared to fly again in most jurisdictions, Boeing appears to be back on track. And its drones and unmanned vehicles are part of its future growth plans.

On the date of publication, Joel Baglole did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.

Joel Baglole has been a business journalist for 20 years. He spent five years as a staff reporter at The Wall Street Journal, and has also written for The Washington Post and Toronto Star newspapers, as well as financial websites such as The Motley Fool and Investopedia.


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