MDA Space (TSX:MDA)(NYSE:MDA) has had a standout year thus far, with its stock climbing an impressive 122% as of the end of June. A big reason for that momentum is a major new federal investment that reinforces the company’s role in Canada’s national defence and surveillance capabilities.
The federal government recently announced a $688-million contract for MDA Space to build and launch a new replenishment satellite. Industry Minister Mélanie Joly said the technology will play an important role in protecting Canada’s security and sovereignty, especially at a time when global tensions are running high.
The satellite will join the RADARSAT Constellation Mission, an Earth-observation network that can scan 90% of the globe up to four times a day. That kind of coverage gives the Canadian Armed Forces valuable intelligence and helps support key operations, from monitoring the Arctic to responding to emergencies.
The new satellite, which won't launch until sometime during the next decade, will use advanced radar technology that can see through difficult weather conditions, including clouds and rain. Jean-Claude Piedboeuf, acting president of the Canadian Space Agency, noted that while Canada does share data with international partners, maintaining control over its own satellites is essential for directing imagery and keeping intelligence secure.
MDA Space is well positioned to benefit from both commercial and national defence opportunities. In the trailing 12 months, the company has generated $1.8 billion in revenue, with net income totaling $105 million over that stretch. At $8 billion in market cap, there's plenty of room for the stock to get a whole lot more valuable in the long run.
