Drones. They're everywhere these days, buzzing around the world from the deserts of Iraq and Syria to the mountains of Pakistan, and even to the White House lawn.

This drone crashed on the White House lawn in January. Photo: U.S. Secret Service.

And when you think of companies manufacturing American drones, several names come to mind:

  • General Atomics, of course. The manufacturer's buzzing, prop-driven Predator flying robots practically inaugurated the "Age of the Drone."
  • Lockheed Martin (NYSE:LMT), and its Beast of Kandahar (oddly, first seen up-close when it was hijacked next door in Iran).
  • Boeing (NYSE:BA) and its ScanEagles, which helped to save "Captain Phillips" off the Somali coast.
  • And of course Northrop Grumman (NYSE:NOC), whose Fire Scout fleet has proven that helicopters, too, can be drones.

One big defense contracting name that rarely makes this list, though, is Raytheon (NYSE:RTN), a company almost totally devoid of high-profile flying drone concepts.

Raytheon wants to change that.

Passing the Manta-l
A couple of weeks ago, Raytheon revealed that it has purchased Tuscon, Ariz.-based Sensitel for an undisclosed sum. Previously a subsidiary of British defense conglomerate BAE Systems (OTC:BAESY), Sensitel manufactures such drones as the "Manta," used for geoscience research, "Silver Fox," developed for the Navy, and "Coyote," a drone that can be deployed by other aircraft, in-air.

BAE unloaded Sensitel in 2013, after deciding the company's focus on small drones didn't fit well with BAE's own desire to build a larger, combat-capable drone. (The Taranis. Read about it here). But Raytheon looks at Sensitel differently. In acquiring the company, Raytheon made a point of emphasizing Sensitel's "expertise" not just in "unmanned aircraft systems" in general -- but in "expendable remote sensing and UAS engineering" in particular.

As it turns out, such expertise slots in pretty well with the drone-niche Raytheon is carving for itself: Disposable drones.

What it means to investors
As a general rule, drones being built by the industry's leaders are all designed to be reusable. Whether you're talking about a Raven or a Predator, a ScanEagle or a Fire Scout, they all launch, perform their missions, return to base, are refueled and launched again -- and that's just fine.

But from an investor's perspective, I actually prefer Raytheon's approach, which seems to me designed to emphasize recurring revenues from the replacement of expendable weapons. Because, you see, the drones Raytheon builds ... are designed to crash.

Fire and forget ... and cash another check
Not immediately, of course. But as a general rule, most of Raytheon's "drones" are actually more like the missiles that Raytheon built its business upon. That is to say, they fly one-way, kamikaze missions, and never need to return to base. The MALD, for example, flies out and confuses enemy air defenses with such tricks as spoofing radar signatures (to make itself look bigger, badder, more numerous and more dangerous than it really is). Its cousin, the MALD-J, does all of the above -- and also tries to jam enemy radars to enhance its confusion even more.

Disposable they might be, but Raytheon's MALDs are far from insubstantial. 9.3 feet long, and weighing 285 pounds, a MALD can fly as far as 500-miles into enemy territory, wreaking havoc with the radar net, and leaving confusion in its wake. When its mission is done, the MALD crashes -- and the Pentagon places another order with Raytheon for a replacement drone.

At upwards of $400,000 per unit, these orders can add up quick. To date, the Pentagon has ordered upwards of 1,300 of these drones from Raytheon -- turning MALD into a half-billion dollar franchise for Raytheon. That's equal to 8% of the $6.3 billion in revenues Raytheon's Missile Systems division rakes in in a year (according to S&P Capital IQ).

As I said, I like this business model a lot. So the fact that Raytheon's doubling down on it by buying Sensitel, it seems to me, is a good thing.

Sensitel's Manta drone, launching from a Navy warship. If it doesn't come back, it'll be time to write another check. Photo: Wikimedia Commons.