The TSX has been highly volatile for most of 2023 due to several events and factors. Geopolitical risks, fluctuating oil prices, runaway inflation, and rapidly rising interest rates negatively impacted stocks. The index only had five winning months at the close of November.
However, two Canadian stocks have outclassed the broader market this year. MDA Ltd. (TSX:MDA) and Telesat Corporation (TSX:TSAT) have limitless growth potential and are well-positioned to dominate the global market.
Space economy
MDA operates in the exciting and expanding global space industry. The $1.4 billion company provides advanced technology and services to nearly all sectors in the space economy, including emerging space companies. Its team has world-class engineering capabilities and space mission expertise and manages a portfolio of next-generation space technologies.
According to management, MDA is ideal for investors looking to participate in a high-growth technology investment. The company focuses on technological innovation in a hyper-connected world. It hopes to lead the space industry into the future.
MDA’s primary objectives are to concentrate on its growth strategy and grow the business book. In the first nine months of 2023, consolidated revenues (Geo-intelligence, Robotics & Space Operations, and Satellite Systems) increased 32.4% to $602.6 million from a year ago. Net income jumped 101.7% year over year to $35.3 million.
The $3.1 billion backlog as of September 30, 2023, represents an 84.5% increase from the same period in 2022. Its CEO, Mike Greenley, said new order bookings include a $2.1 billion Telesat Lightspeed Low Earth Orbit (LEO) constellation award. As the prime satellite contractor, MDA will design, manufacture, assemble and test 198 satellites.
MDA’s acquisition of SatixFy Communications’ digital payload division indicates the continuing investment in digital satellite technology and the pursuit of market opportunities. Greenley adds that the development of MDA’s next-gen Earth observation constellation is ongoing. The company targets a launch window of Q4 2025 and has chosen SpaceX as its launch partner.
At $11.55 per share, MDA investors are up 80.5% year to date. Market analysts forecast a return potential between 24.5% and 55% in 12 months.
Advanced satellites
Telesat is a global satellite operator, and MDA is the builder of its advanced satellites. The $747.3 million company serves or addresses the needs of enterprises and government users. It also provides technical consultation and support services to satellite operators and other industry stakeholders.
Like MDA, Telesat thrives notwithstanding the economic uncertainties. In the nine months (three quarters) that ended September 30, 2023, revenue dropped 2.6% year over year to $538.3 million. However, net income reached $545.3 million compared to the $172.4 million net loss a year ago.
Telesat’s President and CEO, Dan Goldberg, said the Lightspeed LEO program is fully funded and, together with the MDA team, is moving forward. Goldberg firmly believes Telesat Lightspeed will revolutionize broadband connectivity for enterprise and government users. Moreover, he expects the program to deliver growth and value-creation opportunities for Telesat and its stakeholders.
If you invest today, TSAT trades at $14.34 per share (+50.8% year to date).
Very bright future
Market experts often say a stock’s past performance does not guarantee future results. You wouldn’t invested in MDA or Telesat three years ago because of underperformance. However, with a bright future, the share prices could soar to the moon.
