Why Lockheed Martin, Not Elon Musk, Is Poised to Win in Space

NEW YORK ( TheStreet) -- Of all the great science fiction works of the last generation, which do you think might be closest to becoming reality?

Star Wars? Nope. Star Trek? Not a chance. Alien? Go back to your room, kid.

Nope, it's probably Buck Henry's short-lived TV series Quark, whose hero ran an interstellar garbage scow.

News this week of a space contract awarded to Lockheed Martin (LMT) shows we need such a scow badly. The company won a $915 million contract to track the junk that 50 years of space flight has sent spinning around the planet. Raytheon (RTN) was the loser.

With orbiting waste traveling at 17,500 miles per hour, space satellites of all types and the International Space Station itself are at increasing risk of being knocked down by the detritus of past flights. Someone needs to clear out that garbage and can make money doing it.

Space operations are a small part of what Lockheed Martin does. People buy the stock for its defense contracts.

The company reported sales of $10.65 billion for the first quarter, with net income of $933 million, or $2.87 per share, compared with revenue of $11.07 billion a year earlier, with net income of $761 million, or $2.33 per share.

The stock has been a highflier, rising 58% during the last year and commanding a price-to-earnings ratio of 17, thanks in part to a quarterly dividend of $1.33 a share that yields 3.25%.

On Wednesday morning, the stock was trading at $163.77, down 12 cents.

With the U.S. Defense budget flat and possibly heading down in future years, what's going on?

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