Space exploration has long been one of those endeavors that many try to argue has to be the domain of national governments. Not only does space exploration carry a huge price tag and uncertain economic returns that are anathema to companies, but many pundits and observers have worried that their involvement will somehow sully the virtues of pure science and/or lead to unrestrained land-grabs that will be hard to adjudicate in on-the-ground courtrooms.

Nevertheless, private company involvement in space is not only a reality today, but it has been reality for quite some time. NASA didn't build the Saturn-V rocket, Boeing did. Likewise, private companies have been building, launching and operating satellites for decades, as well as supplying NASA, the European Space Agency and other government/military space programs with vehicles, components and so on.

All of that said, it does seem that we are finally on the cusp of real private involvement in outer space. From space station resupply vessels to space tourism to, perhaps, even off-world mining, companies like Orbital Sciences, SpaceX and Virgin Galactic seem to be serious about establishing a viable place for private industry outside our atmosphere.

That said, it is still not all that easy for investors to participate in this evolution.

Once the Domain of Giants
To some extent, investors have always been able to participate in companies exposed to outer space, but it has never really been to a meaningful extent. Companies like Boeing, Lockheed, Northrop Grumman and Alliant Techsystems have long been in the business of building rockets, spacecraft, components, satellites and the myriad other components and systems, like communications and tracking, that go into operating space programs.

The problem here has always been the extent to which space-based revenue is directly visible and significant to the overall performance of the company. Many companies' space programs have been closely tied to military projects, and it can be difficult to draw the line between "space revenue" and "defense revenue."

Moreover, while major projects can carry gaudy price tags (the last shuttle, Endeavour, cost over $2 billion), that's actually not all that much money when you consider that these projects are generally spread across many years and multiple companies (Boeing, for instance, has reported over $73 billion in trailing twelve month revenue.) Consequently, it's hard to say that investing in Boeing was really any sort of real investment in space exploration or development.

The First Generation of Pure Plays
While giant companies like Boeing have always claimed a lion's share of the commercial space market, that has not prevented some smaller companies from getting into the business. While there are a host of small private companies that have offered products and services to NASA over the years, I'm referring mainly to companies like Orbital Sciences and Astrotech (once known as Spacehab).

Orbital Sciences has had a long and sometimes difficult history. While the company has established itself as a viable builder of launch vehicles (including the Taurus, Pegasus, and Minotaur), the company has had difficulties beyond the periodic launch failure. The company's venture into satellite telephony went badly and its commercial satellite operations have a mixed record as well. Nevertheless, the company has largely stayed on NASA's good side and is developing new vehicles for both satellite launches and space station supply missions.

In With the New
What is perhaps most striking about the newest crop of space companies is their ambition. Whereas Orbital Sciences has been content to focus on satellites and unmanned vehicles, many of these new companies are looking to build vehicles to take humans into space.

Arguably the most well-known companies today are SpaceX and Virgin Galactic. SpaceX, founded by Elon Musk of PayPal and Tesla Motors fame, has built SpaceX into the only privately-held company so far to build its own rocket and cargo vehicle and deliver a payload to the International Space Station. SpaceX has already started work (in cooperation with NASA) on spacecrafts that can carry humans, and the company has talked about launching a mission to Mars before the end of the decade.

Virgin Galactic's aspirations are not quite as lofty. Virgin Galactic has been building itself around the goal of becoming a space tourism company - taking passengers on suborbital and orbital space flights. While Virgin Galactic is not ignoring the possibility or opportunity of also facilitating suborbital science launches and/or satellite launches, this is a company largely built around the idea of true commercial space – private citizens paying a private company for trips into space. As part of this venture, Virgin Galactic has also formed a company (The Spaceship Company) with a subsidiary of Northrop called Scaled Composites to develop the spacecraft to be used by Virgin Galactic.

The Bottom Line
For all of the progress made in just the last five years, the reality is that Orbital Sciences is really the only option investors have for an investment that is directly tied to space and space exploration. Commercial space is just too small a part of what companies like Boeing do to support that investment angle. While there is talk that SpaceX may launch an IPO in a year or two, that doesn't help investors today.

While it is still more science fiction than fact, there probably will be a time when investors have an array of companies to invest in that are committed to the commercialization of space. Whether that's in the form of suborbital space planes, commercial launch service providers, vehicle builders, exploration companies or even far-off ideas like asteroid mining or interplanetary travel, nobody knows. But for all of the excitement that likely will attend these developments, investors ought to remember that it is mundane details like viable addressable markets, competitive advantages and sustainable returns on capital that will always separate the winning ideas from the losers.