Space Exploration: Stocks and ETFs to Watch

Saturday’s Crew Dragon Space X launch marked a new era of space exploration. How can investors benefit from the space race?

| More on:

This past weekend, history was made, which may usher in a new era of space exploration. The Space X Crew Dragon became the first privately built ship to ever carry humans to the international space station. Aboard the famous Falcon 9 rocket, Crew Dragon successfully docked on Sunday, some 19 hours after launching from Florida’s Kennedy Space Center.

The momentous occasion is also garnering interest from potential investors. How can one invest in this multi-billion industry? At the moment, Space X is private, but there are several other intriguing options for investors looking for exposure to space exploration. 

Space exploration ETFs

The simplest way to gain exposure to the industry is to invest in an exchange-traded fund (ETF). Although there are no Canadian-listed ETFs, there are two intriguing options south of the border. 

The SPDR S&P Kensho Final Frontiers ETF (NYSEMKT:ROKT) focuses on spacecraft, launch vehicles, rockets, satellites, infrastructure and mission-support services. The fund seeks to provide investment results that track the total return performance of the S&P Kensho Final Frontiers Index. The Index attempts to capture companies whose products and services are driving innovation behind the exploration of deep space and deep sea. 

Among the top holdings, you will find industry leaders such as Raytheon Technologies  and Lockheed Martin. TSX-listed Maxar Technologies is also among ROKT’s top holdings. 

Since launching in late 2018, Kensho performed quite well and had a banner 2019 in which it gained 40.90%. The fund was trending well again in 2020 until the pandemic sent its price crashing. Despite rebounding, Kensho is still trading at a 28% discount to its 52-week high. 

The Procure Space ETF (NASDAQ:UFO) focuses on broadcasting, cable/satellite TV, telecommunications and telecom-equipment industries. The fund seeks to provide investment results that track the “S-Network Space Index” equity Index. The Index serves as an equity benchmark for a global portfolio of companies that engage in space-related business, such as those utilizing satellite technology.

Among the top holdings of this space exploration fund you will find Virgin Galactic, ORBCOMM, and once again, Maxar Technologies. 

Procure only launched in May of last year, and it has lost 23.16% of its value since inception. Over the past month, it is up by approximately 11% and is rebounding along with the rest of the markets. 

A Canadian leader

Outside of the aforementioned Maxar Technologies, Magellan Aerospace (TSX:MAL) is also worth a look in the space exploration industry. Although not a pure play, Magellan has been working with partners in the space industry for over 50 years. 

Magellan’s significant expertise made them key partners in several missions. Most recently, it partnered with the Canadian Space Agency (CSA) on the RADARSAT Constellation Mission (RCM). Canada’s new generation of Earth observation satellites launched in July of 2019. 

According to the CSA, “the satellites will scan our country and its waters daily to help manage our environment and waters. This important data will: help ships navigate safely through Arctic waters, monitor our ecosystems and assist first responders when disasters strike.”

Much like the Crew Dragon spacecraft, the RADARSAT Constellation satellites were launched aboard the SpaceX Falcon 9 rocket. 

As of writing, Magellan is trading at an attractive 8.70 times forward earnings and below book value (0.40). If a new era of space exploration is indeed upon us, then companies like Magellan are well positioned to benefit.

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium service or advisor. We’re Motley! Questioning an investing thesis — even one of our own — helps us all think critically about investing and make decisions that help us become smarter, happier, and richer, so we sometimes publish articles that may not be in line with recommendations, rankings or other content.

Fool contributor Mat Litalien has no position in any of the stocks mentioned. The Motley Fool owns shares of and recommends Virgin Galactic Holdings Inc. The Motley Fool recommends MAXAR TECHNOLOGIES LTD.

More on Investing

Canadian dollars in a magnifying glass
Dividend Stocks

3 High-Yield Dividend Stocks That Are Screaming Buys Right Now

Are you looking for great income stocks? Here's a trio of high-yield dividend stocks that pay insane yields right now.

Read more »

A red umbrella stands higher than a crowd of black umbrellas.
Bank Stocks

Best Stock to Buy Right Now: TD Bank or Manulife Financial?

Manulife continues to see momentum in its business and stock price, while TD Bank stock remains down and out.

Read more »

cloud computing
Tech Stocks

3 No-Brainer Tech Stocks to Buy With $1,000 Right Now

These three Canadian tech stocks could be among the best growth opportunities in the market right now.

Read more »

Piggy bank with word TFSA for tax-free savings accounts.
Dividend Stocks

Transform a $5,000 TFSA Into a $50,000 Retirement Nest Egg

The TFSA is a powerful tool that can grow a small investment into a substantial retirement nest egg over time.

Read more »

Canadian Dollars bills
Metals and Mining Stocks

2 Cheap Canadian Stocks Under $20 to Buy This November

Cheap TSX stocks such as Endeavour Silver are trading at an attractive valuation in November 2024.

Read more »

happy woman throws cash
Tech Stocks

3 Growth Stocks That Could Be Long-Term Wealth Creators

These three growth stocks aim to grow their financials at a higher rate than the industry average, thus delivering superior…

Read more »

how to save money
Bank Stocks

This 5.9% Dividend Stock Pays Cash Every Month

First National Financial (TSX:FN) has a 5.9% yielding dividend that is paid out monthly.

Read more »

gift is bigger than the other
Investing

The Best Canadian Stocks to Buy With $5,000

These Canadian companies have solid growth prospects and the ability to deliver profitable growth even at a large scale.

Read more »