When the discussion of space stocks comes around, their prospects always seem far away, both in distance and time. There are mineral asteroids, planets to explore and communications infrastructure to build in orbit, but it’s a slow process. Then there’s the issue of the highly regulated and complex business landscape of space exploration and development. This, in turn, may turn away the kinds of investors who look to short-term results and continuous progress for confidence.
However, the space race is still alive and it’s up to corporations to win over the final frontier. As a result, private companies like SpaceX and Blue Origin have made the industry more exciting. For investors looking for future fast-moving space stocks, the most important considerations are cash flow, revenue sources and research expenditures.
As such, these three companies excel in consistently winning new contracts, maintaining critical networks and expanding new technologies. The result? Projects with the potential to generously grow a portfolio for the next century of spaceflight.
HEICO (HEI)
Through a diverse set of subsidiaries, HEICO (NYSE:HEI) has expanded into nearly every facet of the space industry. More specifically, the company’s specialization in electronics engineering has made it a critical supplier to several space giants. From its custom integrated circuits business to its satellite payload units, the company has endless ways to capitalize on space.
So far, this diverse product structure has yielded exceptional results for the company, as evidenced by its recent earnings report. For Q2 2024, the company reported record net sales, operating income and net income. Of particular note, its net income rose to $237.8 million, representing a 20% increase year-over-year. Net income remains especially important to aerospace electronics companies like HEICO, as it allows them to re-invest in research and development.
Furthermore, the company’s EBITDA increased by 35% to $252.4 million. This will enable it to better leverage debt for future acquisitions, which are the lifeblood of its aggregate technology-centric business model. All things considered, HEI stock could continue to be one of the most lucrative space stocks on the market today.
Howmet Aerospace (HWM)
Focused solely on the mechanical engineering of the aerospace has paid off handsomely for Howmet Aerospace (NYSE:HWM). The company’s mastery of metallurgy and materials science has enabled it to dominate the North American market. Specifically, it leads the pack in complex fasteners and airframe products for government and commercial programs. As a result, the company holds 88.9% of the aerospace mechanical components market share by total revenue.
This dominance recently provided the company with record Q1 revenue of $1.82 billion, representing a 14% increase year-over-year. With this revenue, the company grew its net income to $243 million, up nearly $100 million from its Q1 2023 income. Thanks to this influx of cash, the company announced a $150 million common stock repurchase plan, further signaling its stability.
Ultimately, investors looking to take advantage of the potentially high-flying future of space stocks should not ignore HWM stock. That’s because the company’s specialized business model and expertise have enabled it to efficiently provide investors with consistent returns.
Garmin (GRMN)
While more centered in military and commercial aviation, Garmin (NYSE:GRMN) has a lot to gain from a growing space industry. Specifically, the company’s prospects come from its new contract to modernize the F-5 platform for the U.S. military. Through this modernization project, Garmin will gain exposure to the T-38 trainer platform from which the F-5 is derived. This will enable the company to develop an avionics suite directly relied on for training astronauts, which could bode well for future contract opportunities.
Furthermore, many of the company’s products, both commercial and government benefit heavily from the expansion of satellite networks currently underway. For investors in GRMN stock, this means greater future opportunities to support growth. This dedication to growing its market relevance shined during the company’s Q1 2024 earnings report back in May.
From a 20% year-over-year growth in revenue, reaching $1.38 billion, to a 51% jump in operating income, the company looks stronger than ever. Thus, savvy investors in space stocks should not pass up the potential Garmin represents.
On the date of publication, Viktor Zarev 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.