America just stumbled in the high-stakes global Space Race.
Last week, a moon landing attempt by Astrobotic Technology failed just hours after liftoff. A fuel leak made the mission impossible. It would have been the first U.S. moon landing since the 1970s.
Days later, NASA announced another setback – its upcoming Artemis 2 and Artemis 3 missions would be delayed by a year due to safety concerns. Those missions aim to send astronauts back to the moon.
Meanwhile, other countries are racing to put their own landers on the moon.
Last year Russia and Japan tried – and failed – to land on the moon without crashing. But India successfully landed a rover near the South Pole of the moon.
Japan is trying another moon landing this weekend. And China is expected to launch a mission to bring back samples from the moon in May.
Here at Intelligent Income Daily, we’re focused on finding the safest income investments on the market. Government spending can be a reliable source of profits for companies with the know-how to land lucrative contracts. And when politicians make up their mind to fund major projects like the space program, there’s money to be made.
Today, I’ll show you why spending on space programs is set to keep increasing… and a “secret” space race few people are talking about. I’ll also give you the name of one company that is set to benefit as the space race continues to heat up.
The Stakes Are Higher Than You Think…
Though the media’s attention is focused on scientific missions to the moon, there’s another space race secretly unfolding.
The world’s most advanced militaries are looking toward space to secure their nations’ power.
It’s no secret that satellites are valuable assets for collecting information. Last year, North Korea launched its first spy satellite. It claimed to have detailed photos of the White House, the Pentagon, and other military bases.
But America’s real rival in space is China.
Over the past decade, China has been rapidly launching satellites to build its own GPS network and improve its ability to spy on other countries. It has also demonstrated weapons for disabling and destroying satellites.
American intelligence agencies are sounding the alarm over China’s space ambitions. The Director of National Intelligence’s recent Annual Threat Assessment concluded that China’s space sector could become a major competitor by 2030… and surpass the U.S. by 2045.
That’s why the Department of Defense is rapidly increasing funding to the nation’s newest branch of the military – the Space Force.
When the Space Force launched a few years ago, its budget was about two thirds the size of NASA. But today, it gets more money than NASA… And that budget is set to keep growing.
In December, the Space Force launched its secretive X-37B space plane on its 7th mission. Its goal is to conduct tests for “operating in new orbital regimes” and demonstrate “space domain awareness technologies.”
We don’t know what that means – yet. But it’s clear that space is a top priority for the military… And it’s going to continue spending billions to dominate the new frontier.
One Company the Government Is Funneling Money To
One way to play America’s big push into space is by investing in L3Harris Technologies (LHX).
L3Harris is one of the top 10 contractors for the Department of Defense.
The company specializes in producing intelligence, surveillance, and reconnaissance communications systems with specialized sensors. It’s also involved in cyber and electronic warfare and provides equipment such as tactical radios and night vision goggles.
L3Harris is also highly involved in space systems, serving as a “prime” contractor on satellite systems. It recently purchased Aerojet Rocketdyne, which will expand its portfolio to include missile and rocket parts, such as those used in NASA’s Space Launch System.
The government prefers to work with certain companies that have a history of delivering on promises… And in the case of military projects, working with top-secret and classified information and technology.
The companies that receive the “prime” contracts work directly with the government to make sure it gets what it wants. It gives them an advantage because they can outsource parts of the project to subcontractors, while keeping a slice of the profits for themselves.
So L3Harris stands to benefit as spending in the space sector continues to increase. And for income investors like us, it gets even better…
L3Harris has increased its dividend every year for 22 years and is likely to announce another increase in March. That long history of dividend increases shows that the company is growing and financially stable.
L3Harris shares currently yield 2.2% and trade at 16X earnings. That’s a 6% discount from its fair value and an attractive price to pay for a company that is likely to grow its earnings at a double-digit rate in the years to come.
So if you want to profit from the space race, investing in L3Harris is one great way to grow your wealth.
Happy investing,
Justin Law
Analyst, Intelligent Income Daily