Space remains the final frontier, and humans are venturing into space more boldly than at any time in our collective past. A growing number of space companies, both public and private, are being used to transport people and goods into outer space, launch satellites, take images of the Earth, and build new crafts that promise to take us further than we’ve ever gone before. According to the nonprofit Space Foundation, the worldwide space economy was worth $469 billion in 2021, a nearly 10% increase from the previous year. Today, according to the World Economic Forum, there are 90 countries actively operating in space. And these numbers are only growing as we push our boundaries further out into the solar system. With space booming, here are three space stocks to buy.
|ARKX||ARK Space Exploration & Innovation ETF||$14|
Space Stocks to Buy: Planet Labs (PL)
San Francisco-based Planet Labs (NYSE:PL) focuses on technology that can deliver images of Earth. The company uses satellites to depict the entire Earth daily to monitor changes and detect trends. Its technology can be used for everything from predicting weather patterns and the crop yields of farmers to helping the Ukrainian military track the movements of Russian forces inside its borders. The company, founded in 2010, went public via a special purpose acquisition company (SPAC) in 2021. Since then, its share price has fallen 54%.
The stock has declined mainly due to the fact that Planet Labs remains unprofitable, while investors have avoided space stocks since the market peaked in November 2021.
However, there are reasons to be optimistic about PL stock. Through the first nine months of 2022, Planet Labs grew its revenue 47% year-over-year, three times faster than in 2020 and 2021.
Planet Labs expects its sales to jump 51% in 2023 and 55% in 2024.
Lockheed Martin (LMT)
Most people know Maryland-based Lockheed Martin (NYSE:LMT) as one of the world’s biggest defense contractors. But the company also has a strong foothold in the space industry. Specifically, Lockheed has a contract with NASA to build as many as 12 Orion spacecraft that are being developed to shuttle human beings farther into space than they’ve ever gone. Lockheed also has a robust satellite business.
And, also for the U.S. government, the company develops cruise missiles boosted by a rocket, enabling them to travel at hypersonic speeds that are 25 times faster than the speed of sound.
Taken together, Lockheed Martin’s space business is a major contributor to the company’s bottom line. In terms of its stock, Lockheed continues to perform admirably. LMT stock has gained 25% over the last 12 months and has a yield of 2.48%.
ARK Space Exploration & Innovation ETF (ARKX)
For investors who like diversification, there is the ARK Space Exploration & Innovation ETF (BATS:ARKX). The space-focused exchange traded fund offered by Cathie Wood’s Ark Invest includes leading aerospace, orbital and satellite-communications names, among others. The fund’s top holdings include Trimble (NASDAQ:TRMB) and Iridium Communications (NASDAQ:IRDM). The fund is focused on the stocks of companies that are at the leading edge of space exploration and innovation.
So far in 2023, ARKX stock is up 12%. Over the last 12 months, however, it has sunk 15%, falling in tandem with the technology sector. This ETF does not pay a dividend, and its price can be volatile.
But for investors who want exposure to the space sector, there are few investment vehicles that provide as much leverage to it as ARKX. The ETF’s expense ratio is a little high at 0.75%. But if the space industry really takes off, then ARKX can be expected to take off along with it.
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.