Sometimes riding secular trends can generate big returns. While hindsight is always 20/20, investors who invested in the trends of the emergence of the desktop PC in the early 90’s, smartphones in 2007, and social networking giants in the late 2000’s, early 2010’s would have made big money. Investing in bitcoin early in 2009 would have made even the poorest person rich today if he had held on to it.
Although it is unclear which companies will be the winners, investing in the next generation of new trends could pay off. One trend, space, is pretty exciting. According to Bank of America Merrill Lynch, the space sector, which currently is a $339 billion market today, will grow to as much as $2.7 trillion dollars by 2045. That’s big money, and there are potentially multiple entry points, including defense, launch, and satellite companies, both public and private.
Among the companies that have ‘medium exposure’ to the space trend is a stalwart giant Boeing Co (NYSE:BA). Given Boeing’s military business, the company will benefit from increased expenditures by the U.S. government on satellites, rockets, and other military vehicles in space. Given that company’s commercial business, Boeing could potentially capture significant market share in terms of sending tourists to space as well. In the future, there is potential to colonize Mars and the Moon, and Boeing, as one of the current market leaders, could potentially play a big part.
Although there are space start-ups backed up by big technology names such as Jeff Bezos and Elon Musk that are pretty competitive right now, Boeing Co (NYSE:BA) has the strongest balance sheet in the sector, and arguably the most advanced technology. The company also has the necessary government and industry connections to capture substantial space market share.
As it stands, Boeing Co (NYSE:BA) is a blue-chip that will benefit from the space trend. The stock has done very well, rallying 65% year-to-date and trades at a forward P/E of 23.45. The equity also pays a nice 2.2% dividend yield at current prices.