By Richard Band, InvestorPlace.com

Lost amid the budget battle on Capitol Hill is the fact that Obama's proposed budget effectively killed George W. Bush's dreams to get Americans back on the moon by 2020.

As part of his $3.8 trillion spending proposal, Obama wants to cancel the Constellation program, a bold space exploration program that called for a return to the moon on new spacecrafts and booster vehicles.

According to government documents released on Sunday, Obama's budget instead proposes spending $6 billion over five years to develop a commercial spacecraft that could ferry astronauts into orbit. 

Under this plan, NASA will be getting out of the launch business by relying on private companies to design and build spacecrafts. Think of this new role as an extension of the FAA -- only thousands of miles higher up. This move is incredibly exciting, and not because I'm crazy enough to want to take a private space flight of my own. I'm excited because this deal opens up some wildly profitable doors for aerospace giant Lockheed Martin (LMT).

There are lots of reasons to love Lockheed even without the potential of a private space race. First of all, at a P/E ratio of barely 10X this year's projected earnings (and a single-digit P/E on next year's net), LMT shares are trading at a great valuation right now. On top of that, LMT is trading dramatically below its norm for the past five years -- going for around $75 a share when it was cruising in the low $100s before the financial crisis before peaking at nearly $120. The icing on the cake is that LMT's dividend yields a generous 3%.

But the commercialization of space travel is what really gets me excited about Lockheed. In 1996 NASA selected Lockheed Martin’s famous "Skunk Works" branch to build a prototype Space Shuttle replacement called the X-33 VentureStar. Unfortunately, after nearly $1 billion in development costs (over $600 million shouldered by Uncle Sam), the X-33 VentureStar project was cancelled in 2001.

Now that Obama is looking to privatize space flight, the X-33 plans could be dusted off and put to good use in the near future. And after the advance of technology over the past 15 years, I have every confidence that Lockheed can make this ambitious but half-finished project a reality.

Lockheed is already an industry leader in warplanes and commercial aviation, so space flight is the next natural step for this company. If Obama gives private companies the green light to taxi astronauts into low Earth orbit, then LMT should soar.

If you're looking for more ways to profit from Obama's budget plans, read: "8 Policy-Proof Stocks That Will Survive Washington."

At the time of this writing, the author owned shares of LMT in personal or client portfolios.

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