The 3 Best Space Stocks to Buy in January 2024
Space is the final frontier. And thanks to technological advancements, ideas that were once science fiction are becoming increasingly possible. With billionaires such as Elon Musk and Jeff Bezos investing huge sums in space firms, the time is right for considering the best space stocks.
It’s important to note that this in still an industry in its early days. That means many companies in the industry are more speculative. But, on the other hand, upside could be tremendous as today’s first movers in the space sector have the opportunity to build massive enterprises on Earth and in the stars. These are three of the best space stocks to own today.
Lockheed Martin (LMT)
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Lockheed Martin (NYSE:LMT) is a leading defense and aviation firm. Most well-known for fighter jets, Lockheed sells a broad range of products to governments and the aerospace industry.
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While most investors associate Lockheed Martin with defense products, it is also a major player in the field of space. Its space and satellites division generates more than $11 billion in annual revenues, making it a key player in the industry.
The outlook for satellites is promising. As prices come down for satellite and launch services, the total addressable market expands. Space imagery and communications services that were once available only to mega-corporations and defense departments will increasingly become a part of many industries’ workflows.
In addition to its own satellite efforts, Lockheed invests broadly across a range of start-ups in the industry. It has partnerships and equity stakes in smaller firms such as Terran Orbital (NASDAQ:LLAP) that give Lockheed ownership in the next generation of space ventures.
Unlike many space stocks, Lockheed Martin is highly profitable and pays a large dividend today. That makes it a blue-chip stock that can give investors a safe way to shoot for the stars.
Planet Labs (PL)
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Planet Labs (NYSE:PL) is a leader in the field of Earth observability. The company takes detailed images of the planet frequently and sells this information to clients.
Earth observability has a wide range of potential commercial customers including transportation, agriculture and forestry, and mining.
Governments are another important customer. Russia’s invasion of Ukraine and the recent hostilities in the Middle East highlight the need for near real-time information about troop movements. Intelligence agencies also prize the sorts of satellite imagery that Planet Labs provides.
Planet Labs stock came about from a former SPAC, and like many SPACs, PL stock received a cold reception from the market. Shares are going for just $2.25 today, and remain near their historic lows.
However, investors should consider that Planet Labs had $315 million in cash and short-term investments on hand as of Oct. 31, 2023. This gives Planet Labs sticking power to continue growing its business and get the share price back on track.
Iridium Communications (IRDM)
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Iridium Communications (NASDAQ:IRDM) is a satellite-based communications company. It operates approximately 66 active satellites to deliver voice and data communications to parts of the planet where traditional options are unavailable.
Iridium has had a troubled history, with it at one point being one of the largest bankruptcies in corporate history. However, it appears the company was simply ahead of its time.
The Iridium of today has become much more successful. The company has grown revenues from $523 million in 2018 to an estimated $790 million for full-year 2023. And profitability metrics have picked up as well. With interest in space-based communications rising and new applications appearing from fields such as Internet of Things, IRDM shares are set to gain altitude.
On the date of publication, Ian Bezek held a long position in LMT stock. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
Ian Bezek has written more than 1,000 articles for InvestorPlace.com and Seeking Alpha. He also worked as a Junior Analyst for Kerrisdale Capital, a $300 million New York City-based hedge fund. You can reach him on Twitter at @irbezek.
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