Space Race Speculation: 3 Stocks Soaring in the New Frontier

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  • If you want to invest in the aerospace industry, you should definitely have one of these space stocks in your portfolio.
  • Intuitive Machines (LUNR): Its services like Near Space Network, Lunar Terrain Vehicle and Commercial Lunar Payload Services show good things to talk about.
  • Rocket Lab USA (RKLB): RKLB demonstrated its prowess in the third quarter with two successful missions.
  • Howmet Aerospace (HWM): HWM specializes in the production and supply of titanium products, extremely important for the industry.
Space stocks - Space Race Speculation: 3 Stocks Soaring in the New Frontier

Source: Dima Zel / Shutterstock.com

When we talk about aerospace companies, we are not only referring to those companies in charge of reaching the moon or those betting on making tourist trips to space. No. Within the aerospace sector are companies responsible for providing the products and materials necessary for those trips to become a reality to the companies carrying out the traveling itself. Among those space stocks are these three doing excellent work to meet each of their objectives. Let’s take a look at them.

Intuitive Machines (LUNR)

Intuitive Machines (LUNR) black and white logo displayed on smartphone screen with desktop screen behind it showing company website and image of moon
Source: shutterstock.com/T. Schneider

If you want to know about key players when it comes to space exploration with incredible infrastructure and services, you should know about Intuitive Machines (NASDAQ:LUNR).

Financially, the company is very well positioned, recently reporting a contract backlog of an impressive $135.2 million, albeit leaving out a major contract with NASA called OMES III for a whopping $719 million. For the third quarter, its revenue increased to $12.7 million, driven by three contracts with NASA for lunar access services.

Intuitive Machines stands out because it has outstanding award decisions of over $3 billion for services such as Near Space Network, Lunar Terrain Vehicle and Commercial Lunar Payload Services.

On top of that, in a recent move, the company participated in an option exercise agreement, generating approximately $11.8 million in gross proceeds.

Of course, its financial numbers are not the only amazing thing about this company, it is also forging strategic alliances. One of the many important alliances is with Boryung Corporation, a leading South Korean healthcare investment firm.

The purpose of this alliance is to explore the critical infrastructure around the moon, contributing to a long-term life sciences campaign for space research. Making life on the moon? Who knows, maybe soon.

Rocket Lab USA (RKLB)

Person holding smartphone with logo of aerospace company Rocket Lab USA Inc. (RKLB) on screen in front of website. Focus on phone display. Unmodified photo.
Source: T. Schneider / Shutterstock.com

The great space industry pioneer, of course, can’t fail to capture the attention of investors. When we talk about the industry pioneer, I’m referring to Rocket Lab USA (NASDAQ:RKLB), a major innovator in space launch services and satellite technology.

During the third quarter, its large Electron rocket, designed to be the world’s first reusable small orbital rocket, showed its prowess with two successful missions. These missions, mainly marked by the deployment of satellites for NASA and other customers, proved Rocket Lab’s commitment to reusability through ocean landings and recovery efforts.

But its successes don’t stop there. The company received the green light from the Federal Aviation Administration to resume Electron launches, showing resilience despite the challenges it has faced. On top of that, the company’s growth has a very good horizon, with two years of launches fully booked.

Speaking of numbers, RKLB was able to secure a $515 million contract with the Space Development Agency to design and build 18 Tranche 2 data Transport Satellites. That undoubtedly positions Rocket Lab as a leading satellite prime contractor, making a strong commitment to serving the U.S. defense and intelligence community.

Howmet Aerospace (HWM)

a private plane inside a hangar is prepared for a flight. represent aerospace stocks
Source: Shutterstock

Last but not least, we have another key player in the aerospace industry, Howmet Aerospace (NYSE:HWM), which specializes in the production and supply of titanium products for various aerospace components.

During the third quarter, the company posted excellent results with wonderful growth. It had a 16% year-over-year increase in revenue to $1.66 billion.

HWM’s net income soared to $188 million, compared to $80 million in the same quarter of 2022. Now, that was a lot of growth. Howmet’s solid position was more than demonstrated with an operating income margin of 18.5%.

But it wasn’t all good for the company, as it faced a lawsuit from Lockheed Martin (NYSE:LMT) regarding the F-35 Joint Strike Fighter Program. But Howmet didn’t sit idly by, as the company highlighted its long-standing role as a proud Lockheed Martin supplier, providing essential titanium products for decades.

Moreover, despite the disruption in the global supply of titanium sponge due to major geopolitical events, which led to higher prices, Howmet managed to maintain a healthy cash balance of $425 million at the end of the quarter.

In addition, the board of directors declared a dividend of 93.75 cents per share on the $3.75 outstanding cumulative preferred stock, demonstrating a clear commitment to shareholder return.

As of this writing, Gabriel Osorio-Mazzilli 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 writer, subject to the InvestorPlace.com Publishing Guidelines.

Gabriel Osorio is a former Goldman Sachs and Citigroup employee. He possesses discipline in bottom-up value investing and volatility-based long/short equities trading.


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