An industry slated to grow to a trillion-dollar concern over the next 20 years, space is the next big thing in growth investing. Anyone holding shares in Maxar Technologies (TSX:MAXR)(NYSE:MAXR) for the long-term must think so.
For anyone seeking to gain exposure to the “final frontier” of investment, the stock is going sky high, soaring over 14% on a glut of deals and a definite “buy” today.
J.P. Morgan‘s Benjamin Arnstein has called Maxar “a high-risk/high-reward opportunity in the space industry,” with the firm stating their belief that Maxar is entering a new phase that could yield more than 70% upside by the conclusion of next year.
Paying a small dividend of 0.57%, Maxar might not be one for the passive income crowd. However, its ability to cut deals with a heavenly host of industry benefactors isn’t doing Maxar’s share price any harm, making it a buy for starry-eyed capital gains investors.
Indeed, the stock is beginning to recover inch by inch, although it still has a long road to recuperation after last summer’s precipitous crash.
Space: The final frontier for stratospheric growth
Maxar is making deals left, right and centre at the moment. Last month saw MDA, a Maxar company, land a pair of prestigious contracts with the Canadian Space Agency, with the branch becoming heavily involved with the innovative Gateway External Robotic Interfaces project.
The deal also makes Maxar stock a clear buy for Canadian investors bullish on the country’s relationship with the U.S.
As Mike Greenley of MDA puts it: “This project will leverage MDA’s world-leading space robotics capabilities, gained through the Canadarm programs, and will be an important component of Canada’s contribution to the NASA-led Gateway. We are proud to deliver new jobs in Canada and engage our Canadian supply base in preparation for Canadarm3.”
Shares in Maxar could go through the roof – and beyond
Making use of material assets while growing the Canadian job market are positive signs that a company is investment grade. While Canada and the U.S. don’t yet class space as a key industry sector, the U.K. does, and North America is likely to follow suit as the industry becomes further developed.
Indeed, the new space race is becoming increasingly international in scope, with everyone from India to Israel ramping up their off-world initiatives, and Maxar is uniquely well placed to profit.
In terms of market share, even Maxar’s biggest competitor, SpaceX, might be hard-pressed to impress as comprehensively, as Maxar has done of late when it comes to forging new off-world deals and networking.
With decades of expertise under its belt, Maxar is a world leader in satellite communications. Just look at the HughesNet high-speed Internet project, driven by advances such as Maxar’s JUPITER 1/EchoStar XVII and JUPITER 2/EchoStar XIX, with JUPITER 3 under production.
The bottom line
Maxar’s strong standing in the space tech community is one of the best reasons to back up the truck. For long-term growth in a trillion-dollar industry with few big players at the moment, there aren’t many better deals than Maxar.
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 Victoria Hetherington has no position in any of the stocks mentioned. Maxar Technologies is a recommendation of Stock Advisor Canada.