Here's an interesting angle on investing in SpaceX without owning SpaceX. Marc Lichtenfeld of the Oxford Income Letter is promoting what he calls a “SpaceX Royalty Portfolio,” built around companies supplying the infrastructure Elon Musk needs. One of his pitches focuses on something surprisingly basic, oxygen. Back in 2021, SpaceX faced shortages of liquid oxygen, which its rockets need for propulsion.
The company Lichtenfeld is highlighting? Linde (LIN). Linde is an industrial gas giant that built a roughly $100 million facility near SpaceX's Starbase in Texas to supply gases needed for launches. The investment pitch is simple, SpaceX can build more rockets, but it still needs suppliers to launch them. Linde also has a long history of dividend increases.
But here's the catch. Linde is a roughly $230 billion company serving industries worldwide. Even if its SpaceX business doubles, the impact on overall revenue could be relatively small. And its dividend yield is only around 1.3%.
Lichtenfeld also highlights Vale (VALE), a major nickel supplier with a Tesla relationship. But Vale makes most of its money from iron ore, not nickel, and its dividend fluctuates significantly.
So these aren't really SpaceX royalties. They're shares in established companies with some exposure to Musk's businesses.
Would you rather invest in SpaceX itself, or own the companies supplying the materials it can't operate without?
Marc Lichtenfeld, Oxford Income Letter
Ran both through my 9 rules with Lyn's Lens on top. .
LIN (Linde) 4 of 9
✅ Debt only about 12% of market cap
✅ P/E about 29x forward, in my band
✅ Dividend payout 40%
✅ CEO pay is a rounding error on $35B revenue
❌ Yield 1.3%, need 3% or more
❌ Cash $4.9B does not cover debt $28B
❌ Free cash flow covers expenses about 1.3x, need 2x
❌ Chemicals sector, not on my list
❌ Growth plus yield lands near 12% a year, under my 15% Bitcoin bear hurdle
Lyn's Lens: profitable, but her entry is $314 to $348. At $508 you pay about 47 years of free cash flow. Great business, bad price. The SpaceX plant is a rounding error in a $234B company.
VALE (Vale) 3 of 9
✅ Yield 8.9%
✅ P/E 25.9x in my band
✅ CEO pay passes
❌ Debt about 38% of market cap
❌ Cash does not cover debt
❌ Free cash flow cover is borderline, under 2x
❌ Payout 225% of earnings. SWS says the dividend is not well covered
❌ Mining sector, not on my list, and nickel is the small piece
❌ Growth is a bounce off a trough. Revenue forecast is 0.8% a year, no path to outgrow Bitcoin
Lyn's Lens: profitable but thin, net margin under 5%. Her entry is about $10.86 and the stock is already above it.
Both are a pass for me.
Sounds like another letter you need to unsubscribe from, SpaceX has their own ASU's at the launch sites to create LOX already