5 Top Aerospace Stocks To Watch As Richard Branson Vows To Beat Jeff Bezos To Space
It hasn’t been smooth sailing for aerospace stocks over the past year, with companies in the sector getting hit hard by COVID-19. However, there is no denying that the space economy’s potential has drawn considerable attention. In fact, an array of aerospace stocks have been making their marks in the stock market, of which many have taken the SPAC route.
You don’t need to be an expert to be keen on the aerospace industry. And you certainly don’t have to be a Trekkie to appreciate the vast potential of the space economy. There are several reasons why the industry has taken off the way it has of late. From technological advancement and significant investments now coming from private enterprises, these are major tailwinds making space travel a reality.
According to Morgan Stanley, the global space industry could grow significantly over the next two decades. The market size may rise from about $350 billion currently to over $1 trillion by 2040. Therefore, finding the best aerospace stocks to buy could be a mega trend for investors with considerable risk appetite. With all that being said, let’s look at some of the more promising aerospace stocks in the stock market today.
Top Aerospace Stocks To Watch In July 2021
- Virgin Galactic Holdings Inc. (NYSE: SPCE)
- Astra Space, Inc. (NASDAQ: ASTR)
- Lockheed Martin Corp. (NYSE: LMT)
- Raytheon Technologies Corp. (NYSE: RTX)
- Northrop Grumman Corp. (NYSE: NOC)
If you’re looking for top aerospace stocks to buy now, Virgin Galactic most likely tops the list. This came after the company’s announcement on Thursday that Virgin Galactic will attempt to launch its next test spaceflight on July 11, nine days before Jeff Bezos. SPCE stock jumped over 20% as of 8:55 a.m. during its pre-market trading right now. If anything, today’s jump in SPCE stock reflects investors’ hope for the company. They are cheering Virgin Galactic’s progress in terms of the timeline of the launch.
“After more than 16 years of research, engineering, and testing, Virgin Galactic stands at the vanguard of a new commercial space industry, which is set to open space to humankind and change the world for good,” Branson said in a statement. “I’m honoured to help validate the journey our future astronauts will undertake and ensure we deliver the unique customer experience people expect from Virgin.” If all goes as planned, Branson would become the first billionaire to travel to space aboard. Now that we have a scheduled date for the launch with Branson in it, SPCE stock will be an interesting aerospace stock to watch in the coming weeks.
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Next up, we have Astra Space, which went public recently with Holicity. For the uninitiated, Astra merged with Holicity, a SPAC that was headed by Craig McCaw. The SPAC also received backing from Bill Gates through a sponsoring fund called Pendrell Corporation. From this merger, Astra raised approximately $500 million in cash proceeds with means to accelerate growth, expand its addressable market, and develop its space services platform.
For investors in Astra, ASTR stock was off to a great start in the stock market. The company’s business model of building rockets provides investors with the opportunity to get their hands on the rare opportunity. For this reason, it is not surprising that ASTR stock was met with impressive investor demand. Astra’s focus on building cheaper and better rockets could prove itself to be a needle in a haystack in an industry where it is difficult to be profitable. For investors looking for top aerospace stocks to buy, ASTR stock could be music to their ears.
Lockheed Martin is a global leader in the aerospace, military support, and security tech industries. Thanks to its massive portfolio, the company is also one of, if not the world’s largest defense contractors. Safe to say, when it comes to national security, Lockheed Martin would be a leader in the space. Likewise, investors looking to invest in the defense industry would turn to LMT stock right now.
In its recent quarter fiscal posted in late April, Lockheed Martin raked in a total revenue of $16.3 billion for the quarter. On top of that, the company also saw a 47% increase in cash on hand, totaling $2.93 billion. Earlier this year, Lockheed Martin also striked a new collaboration with General Motors (NYSE: GM). Essentially, the duo is developing next-generation lunar vehicles for the National Aeronautics and Space Administration (NASA). Seeing as Lockheed Martin is teaming up with a leading name in the automotive industry, we could be looking at a powerful alliance here. While the company looks towards greater heights in space exploration, do you think LMT stock could follow suit?
Raytheon is a company that engages in providing advanced systems and services for commercial, military, and government customers worldwide. It is one of the largest aerospace, intelligence services, and defense manufacturers in the world by revenue and market capitalization. Just yesterday, the company won an about $2 billion contract by the U.S. Air Force to develop and make a nuclear-armed missile.
The company’s business may have taken a strong hit during the pandemic, and investors may also have shied away from the sector. However, with commercial air flights rebounding strongly from 2020, investors can expect a sharp recovery in commercial aerospace as aircraft engines need service again. Not to forget airplane production and aftermarket services will pick up pace as well. While waiting for the commercial aerospace business to return in full force, the company’s defense business will support the company with solid earnings and cash flows. All things considered, would you bet on RTX stock as the economy recovers?
To sum up our list, Northrop Grumman is a highly diversified aerospace and defense company. The company has a long history as a government space leader. This came after the acquisition of Orbital ATK in 2018. The space segment has been a standout performer in Northrop. In detail, the space business increased its sales by 29% during Northrop’s most recent quarter.
As of late, Northrop’s space business is involved in launch and propulsion systems, human spaceflight, commercial satellites and payloads, and a large top-secret component. For investors who are new to the space market, the company also scored a $85 billion program from the Pentagon to replace the nation’s intercontinental ballistic missile and separate $50 billion franchise to develop the new B-21 bomber. The push to modernize nuclear missiles bodes well with Northrop. Northrop is also partnering with Raytheon Technologies to develop the next-generation military interceptor. Given that the company has secured highly lucrative defense contracts, I guess it’s safe to say that NOC stock could continue bringing sizable gains for its investors.