Satellite builder Maxar Technologies Inc. (NYSE: MAXR) has become a stock to watch. In 2020, Maxar’s share price grew from $16.60 on 2 January to $27.25 on 23 November.
I think all the publicity about SpaceX and Blue Origin’s launches drives interest in space stocks. For instance, SpaceX’s Crew Dragon just took four astronauts to the International Space Station (ISS). Moreover, SpaceX’s Falcon 9 rocket landed on a barge in the ocean.
Moreover, Blue Origin has several contracts with NASA, including an effort to develop a space-robot operating system, Techcrunch reports. Blue Origin is also developing the Integrated Lander Vehicle, a next generation moon lander and part of NASA’s Human Landing System (HLS) program, a press release indicates. Blue Origin claims to have tested precision lunar landing technology with its New Shepard rocket.
Sorry no SpaceX and Blue Origin IPOs soon
However, both Blue Origin and SpaceX are private companies. Moreover, I doubt those companies’ billionaire owners have no incentive to hold initial public offerings (IPOs). To explain, Jeff Bezos’ the world’s richest man owns Blue Origin. Bezos has no need of money.
Moreover, I think Bezos and SpaceX owner Elon Musk fear shareholders could make them abandon their dreams of colonizing space. However, the two billionaires do not whatever they want in space with private companies as long as they spend their own money.
Thus, people who want to invest in space but want to stay away from defense contractors such as Northrop Grumman (NOC) will look at Maxar (MAXR).
What is Maxar Technologies?
Maxar Technologies (MAXR) builds space vehicles such as the Galaxy 37 geostationary communications satellite. Maxar is one of four recent satellites Intelsat purchased from Maxar.
Intelsat has bought 59 spacecraft from Maxar since the 1970s, Megan Fitzgerald, Maxar’s Senior Vice President of Space Programs Delivery claims. Intelsat is contracting with Maxar for its next generation 40 geostationary communications satellite.
Maxar also built the BSAT-4B Satellite for the Broadcasting Satellite System Corporation. The BSAT-4B can broadcast 4K and 8K Ultra HD (high definition) television to Earth.
Maxar has been building satellites for over 60 years. Maxar claims to have built over 90 communications satellites in that time. Uses for Maxar satellites include communications, mapping, surveillance, intelligence-gathering, and imagery.
Thus, Maxar sells space products for which companies will pay money. In contrast, SpaceX and Blue Origin’s businesses are theoretical. For instance, nobody will pay money for a space habitat or a Mars colony unless those things exist.
Is Maxar Technologies Making Money?
Maxar (MAXR) makes some money. It reported a quarterly operating income of $7 million on 30 September 2020.
In addition, Maxar made a $106 million quarterly gross profit on quarterly revenues of $436 million on 30 September 2020. Maxar is making less money in 2020. Maxar reported a quarterly gross profit of $122 million and a quarterly gross profit of $252 million on 31 December 2019.
Moreover, Maxar’s quarterly revenues rose from $410 million on 31 December 2019. Stockrow estimates Maxar’s revenues grew at a rate of 5.57% in the quarter that ended on 30 September 2020.
What Value does Maxar have?
Maxar (NYSE: MAXAR) generates some cash, it reported a $96 million quarterly operating cash flow on 30 September 2020. The quarterly operating cash flow rose from $51 million on 30 June 2020 and fell from $171 million on 31 December 2019.
Notably, Maxar’s quarterly ending cash flow fell from $152 million on 30 June 2020 to -$119 million on 30 September 2020. Maxar had $60 million in cash and short-term investments on 30 September 2020. The cash and short-term investments fell from $177 million on 30 June 2020.
Maxar offered a little value in the form of $4.565 billion in total assets on 30 September 2020. Maxar’s total assets fell from $5.157 billion on 31 December 2019.
Is Maxar a Value Investment?
Maxar will pay a small quarterly dividend of 1₵ on 31 December 2020. Thus, Maxar is a cheap space technologies stock that pays a dividend.
However, I think the dividend is too small to make a difference for ordinary people. Thus, Dividend.com estimates Maxar shares offered a 4₵ annual dividend and a 0.14% dividend on 23 November 2020.
If you are looking for a cheap value investment in space technology, I think Maxar is worth a look. However, if you want a stock that makes money, you need to avoid Maxar (NYSE: MAXR).
Originally published at https://marketmadhouse.com on November 23, 2020.
