May the force be with you…Space Force, that is.
President Donald Trump signed a Space Policy Directive 4 commencing the lengthy process of forming a new branch of the United States military, the Space Force. The branch is expected to focus its efforts on preparing the US for possible space-based war and safeguarding American interests in space.
It will hold the same position and rights as the other military branches, like the Air Force and the Army. With the advent of Space Force there are several companies in the defense sector that have signaled support for the formation of Space Force and are likely to receive some big time contracts from it. Here are some of the stocks that are likely to benefit from the plan if its approved by Congress.
Lockheed Martin
Lockheed Martin (NYSE: ) stock is in a prime position to rocket as a result of the formation of the Space Force. Based in Bethesda, MD, the company is one of the largest manufacturers for defense and other government markets. Lockheed Martin has long been a leader in the defense industry, thanks to its expertise in rocket launching, ground systems, and satellites.
Since we rely heavily on satellites for defense measures, the Defense Advanced Research Projects Agency (DARPA) is looking at launching a plethora of smaller satellites into orbit that they think will be more likely to survive attacks. This puts Lockheed Martin in a favorable position to take this job on especially since they were just awarded a $2.9 billion contract by the Air Force last summer for the development of 3 satellites designed to withstand counter space weaponry.
The company posted revenue of 53.762 billion for the fiscal year ended December 2018 and currently has a market cap of $85.913 billion. Shares of the company have rallied 17 percent since the beginning of the year.
Boeing
Another company likely to benefit from the Space Force initiative is Boeing (NYSE: ). The company engages in the manufacture of defense, space and security systems as well as commercial jetliners, satellites and rocket launch components.
“I am very encouraged by what I see is the Administration leaning forward on investing in all dimensions of space, not just Space Force but more broadly, the work going into space exploration and the re-invigoration of that entire ecosystem,” Boeing CEO Dennis Muilenburg told TheStreet.
Boeing has been doing business with government for years so they are in prime position to snag a few more contracts from Space Force. Boeing has a wide range of services for the government with specialties in aerospace, satellites, defense, weapons,
Boeing posted monster earnings beat in January with full-year revenues surpassing the $100 billion mark for the first time. BA stock yields 2 percent and is up 30 percent year to date.
Northrop Grumman Corp.
Northrop Grumman (NYSE: ) is one of the largest U.S. defense contractors. In 2017, the company took an aggressive step into the space market when it acquired Virginia-based Orbital ATK.
The $9.2 billion cash and debt deal gave Northrop a broad suite of space-based capabilities such as experimental robotic spacecrafts and bus-sized communication satellites. NOC stock has gained more than 17% year-to-date.
Honeywell International
Honeywell International (NYSE: ) is an industrial conglomerate based in Charlotte, North Carolina. The company engages in various industrial segments ranging from defense technology, industrial automation, oil & gas, residential, and aerospace.
The company is certainly expected to gain from the Space Force considering that it has partnered with the National Aeronautics and Space Administration (NASA) for many years. Honeywell International shares are up 16.96 percent this year and have a yield of 2.1%.
United Technologies Corp.
United Technologies Corp., (NYSE: ) based in Hartford, Connecticut, is a diversified company manufactures high tech products and services to the aerospace and building industries.
Last year, the U.S. Department of Defense awarded the company a $436 million contract modification for testing, designing, and fabricating flight-weight adaptive engines. UTX stock has gained 20 percent since the beginning of the year and has a yield of about 2.2 percent.
