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What are we looking for?

Sustainable dividends from top companies ready to soar in the expanding space industry.

The screen

Competing journeys into space by billionaires Sir Richard Branson and Jeff Bezos highlight the tourism potential of space. They also bode well for investors focused on the down-to-earth pursuit of sustainable dividends.

While Sir Richard’s Virgin Galactic Space Holdings Inc. doesn’t pay a dividend – and Mr. Bezos’s Blue Origin LLC and Elon Musk’s Space Exploration Technologies Corp. (SpaceX) are not yet publicly traded – there are lots of ways to invest in space for dependable dividends.

Our search started with an extensive list of dividend-paying Canadian and U.S. stocks with growing space divisions. We then applied our TSI Dividend Sustainability Rating System to find those with attractive prospects ahead. Our system awards points to a stock based on key factors:

  • One point for five years of continuous dividend payments – two points for more than five;
  • Two points if it has raised the payment in the past five years;
  • One point for management’s commitment to dividends;
  • One point for operating in non-cyclical industries;
  • One point for limited exposure to foreign currency rates and freedom from political interference;
  • Two points for a strong balance sheet, including manageable debt and adequate cash;
  • Two points for a long-term record of positive earnings and cash flow sufficient to cover dividend payments;
  • One point if the company’s an industry leader.

Companies with 10 to 12 points have the most secure dividends, or the highest sustainability. Those with seven to nine points have above-average sustainability; average sustainability, four to six points; and below-average sustainability, one to three points.

More about TSI Network

TSI Network is the online home of The Successful Investor Inc. – the group of widely followed Canadian investment newsletters by editor and publisher Pat McKeough. They include our award-winning flagship newsletter, The Successful Investor. The TSI Best ETFs for Canadian Investors is the latest. TSI Network is also affiliated with Successful Investor Wealth Management.

What we found

Sustainable dividends from top companies ready to soar in the expanding space industry

Ranking*CompanyTickerDiv. Sustain. RatingPointsDiv. Yld. (%)Mkt. Cap. (US$ Bil.)1Y Ttl. Rtn. (%) Recent Price (US$)
1Lockheed Martin Corp.LMT-NHighest102.9102.9-4.4361.64
2General Dynamics Corp.GD-NHighest102.454.833.3195.87
3Raytheon Technologies Corp.RTX-NAbove Average92.4131.149.585.82
4Northrop Grumman Corp.NOC-NAbove Average91.858.410.0357.25
5Leidos Holdings Inc.LDOS-NAverage61.515.02.494.48

Source: Dividend Advisor.

*Ranking is determined by TSI Dividend Sustainability Score. Where overall points are the same, analysts considered P/E, dividend yield and industry outlook to decide final placements.

Our TSI Dividend Sustainability Rating System generated five stocks.

Virginia-based Leidos Holdings Inc. was recently awarded a US$2.5-billion contract to support NASA’s telecom, cloud and data-centre services across all of its facilities. Northrop Grumman Corp., also headquartered in Virginia, is a key partner in NASA’s Artemis moon-landing program and more. Massachusetts-based Raytheon Technologies Corp. makes satellite command-and-control systems as well as spacecraft components. Lockheed Martin Corp., headquartered in Maryland, is an industry giant that makes a range of satellites and space transportation systems. Virginia’s General Dynamics Corp. also offers an array of satellite and space products – including key communications links for NASA’s recent Mars Perseverance rover landing.

Note: Canada is very much in the space race. Brampton, Ont.-based MDA Ltd., formerly a unit of Colorado-based Maxar Technologies, was recently awarded a contract for work on Canadarm3 and is primed for growth. TSX-listed MDA doesn’t yet pay a dividend.

We advise investors to do additional research on any investments we identify here.

Scott Clayton, MBA, is senior analyst for TSI Network and associate editor of TSI Dividend Advisor.

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