These Companies Have Seen Large Returns From 2020 Government Investment

Much focus on investment comes from the private sector, particularly those of the venture capitalist persuasion. But one of the biggest investors this country has is the federal government.

Why It Matters: As Mariana Mazzucato, an economics professor at University College London, explains in her book "The Entrepreneurial State," much of business creation — including Google’s search engine and new pharmaceuticals — stems from government investment from agencies like the National Science Foundation and National Institutes of Health.

For example, Tesla developed its battery and solar panel technology from a U.S. Department of Energy grant.

In 2020, most money, likely due to attempts to build a vaccine against COVID-19, was invested in America’s private health sector.

Modernatx, part of Moderna, Inc. MRNA received $955 million; Emergent Manufacturing Operations, part of Emergent BioSolutions EBS got $628 million; and AstraZeneca PLC AZN was given $413 million.

In the aggregate, defense contracts got the biggest investment, with $286 million going to Jacobs Engineering Group J, $188 million to Leidos Holdings Inc LDOS and $163 million to Lockheed Martin Corporation LMT.

The American manufacturer of tires and aeronautics, Aerojet Rocketdyne Holdings AJRD, received $386 million.

What It Means: If you had invested in a company like Moderna in November 2020 and held it until today, you would have made a 300% return.

But more obscure companies like Jacobs Engineering Group also experienced a big boost from about $100 per share in November 2020 to $133 today. During that same period, Leidos Holdings jumped about $20 per share.

Photo: Unsplash photo by Ajay Parthasarathy.