BAE Systems shares: a safe haven in this time of turmoil?

first_img Stuart Blair | Monday, 11th May, 2020 | More on: BA Enter Your Email Address Renowned stock-picker Mark Rogers and his analyst team at The Motley Fool UK have named 6 shares that they believe UK investors should consider buying NOW.So if you’re looking for more stock ideas to try and best position your portfolio today, then it might be a good day for you. Because we’re offering a full 33% off your first year of membership to our flagship share-tipping service, backed by our ‘no quibbles’ 30-day subscription fee refund guarantee. One stock that I particularly like at the moment is the defence specialist and FTSE 100 company BAE Systems (LSE: BA). BAE Systems’ shares have fallen around 25% since February, and this has provided an opportunity in a stock that has not been affected as significantly as businesses in other industries. Whilst BAE stated that it was seeing “more significant disruptions” in the second quarter, it also reported no material impact on business during the first quarter.BAE Systems shares: backed by governmentsA particularly appealing element of the stock is the fact that its revenues are government-backed. Although defence may not be the first priority for governments round the world at the moment, heightened geo-political tensions will certainly still necessitate spending. BAE’s established position in a number of countries (including the US, the UK and Saudi Arabia) will therefore be very useful over the next few years, and should provide BAE with a solid income where other industries are struggling.5G is here – and shares of this ‘sleeping giant’ could be a great way for you to potentially profit!According to one leading industry firm, the 5G boom could create a global industry worth US$12.3 TRILLION out of thin air…And if you click here we’ll show you something that could be key to unlocking 5G’s full potential…BAE has also received new customers in the past few years, including Qatar and Australia. This constant expansion to new areas should provide steady sources of income and help offset any losses caused by a reduction in defence spending by some of the key customers.The potential for future growthI can also see future growth for BAE Systems’ shares due to the company branching out to different products. For example, 5% of its products now concern cyber-security and this offers an extra dimension to the company.BAE has also recently acquired Collins Aerospace’s Military GPS business and Raytheon’s Airborne Tactical Radios business for a combined c.$2.2 billion. Both these acquisitions will add to BAE’s Electronic Systems division and will hopefully harness growth in this area for years to come. This acquisition complements a number of other partnerships with different companies to ensure that BAE Systems is able to deliver innovative approaches to defence.Balance sheet brillianceThe final reason why I would buy BAE Systems shares is due to a strong balance sheet. Although the recent suspended dividend may cause some concern, it has been done to preserve around £443 million in cash and add a layer of protection to the company. BAE is also likely to pay the deferred final dividend in the second half of 2020 at a yield of nearly 5%. BAE also has sufficient liquidity (£2.6 billion) to deal with the crisis, and has managed to reduce debt over the past few years. Access to £2 billion in revolving credit should also strengthen BAE’s financial position.For these three reasons, I view BAE as a strong and safe stock that should stay resolute during the crisis. Therefore, I would recommend BAE if you’re looking for a stock with limited risk, but further opportunities for growth and a nice dividend yield as well. Image source: Getty Images Click here to claim your copy now — and we’ll tell you the name of this Top US Share… free of charge! Our 6 ‘Best Buys Now’ Shares Stuart Blair owns shares in BAE Systems. The Motley Fool UK has no position in any of the shares mentioned. Views expressed on the companies mentioned in this article are those of the writer and therefore may differ from the official recommendations we make in our subscription services such as Share Advisor, Hidden Winners and Pro. Here at The Motley Fool we believe that considering a diverse range of insights makes us better investors.center_img I would like to receive emails from you about product information and offers from The Fool and its business partners. Each of these emails will provide a link to unsubscribe from future emails. More information about how The Fool collects, stores, and handles personal data is available in its Privacy Statement. I’m sure you’ll agree that’s quite the statement from Motley Fool Co-Founder Tom Gardner.But since our US analyst team first recommended shares in this unique tech stock back in 2016, the value has soared.What’s more, we firmly believe there’s still plenty of upside in its future. In fact, even throughout the current coronavirus crisis, its performance has been beating Wall St expectations.And right now, we’re giving you a chance to discover exactly what has got our analysts all fired up about this niche industry phenomenon, in our FREE special report, A Top US Share From The Motley Fool. Simply click below to discover how you can take advantage of this. BAE Systems shares: a safe haven in this time of turmoil? “This Stock Could Be Like Buying Amazon in 1997” See all posts by Stuart Blairlast_img read more