Whereas the investing world frets concerning the impression of a tariff battle on asset costs, some FTSE 100 shares simply hold transferring increased. BAE Techniques (LSE: BA) is one instance.

Unimaginable acquire

Maybe this isn’t a lot of a shock. The UK defence juggernaut was at all times more likely to be in favour after European nations and the UK got here collectively to declare their assist for Ukraine following the disastrous assembly between Presidents Trump and Zelenskyy on the White Home.

However, I believe even probably the most bullish of holders might be delighted by simply how effectively issues have panned out. I say this purely from an funding perspective, after all.

As I sort, BAE Techniques inventory has recorded a 31% acquire within the final month. Put one other approach, a £10,000 stake within the firm only some weeks in the past is now price £13,100. That’s the type of price rise one may see from a blue-sky penny inventory!

In case you hadn’t guessed, this return additionally significantly exceeds that of the key indexes. The FTSE 100 itself has fallen 2% over the identical interval. The S&P 500, with all its tech titans, has dropped over 7%.

Extra to come back?

There’s an argument that issues might get even higher for buyers.

No matter whether or not a peace deal had been struck between Ukraine and Russia, defence spending appears prefer it’s solely going in a single path. European leaders are seemingly sceptical that President Putin will stick with any phrases. There’s additionally a way that ties with Trump are actually so stretched that our collective reliance on the US for navy assist has come to an finish. As a significant participant within the area, this might present one other enhance to the BAE Techniques share price.

That mentioned, there are some things price noting.

All priced in?

First, the inventory now trades at a forecast price-to-earnings (P/E) ratio of 21. That’s greater than the mid-teens common valuation of FTSE 100 companies. It’s additionally increased than the the corporate’s common P/E over the past 5 years (16). I truly keep in mind the exact same inventory altering arms for lower than 10 occasions earnings a little bit additional again.

So, it appears loads of excellent news is already priced in. That would carry out a number of profit-takers if expectations are discovered to have exceeded actuality when the corporate releases information on earnings.

One also needs to take into account the likelihood that a few of BAE’s largest prospects — such because the aforementioned US — might cut back spending going ahead or select to solely cope with home-grown contractors.

Dividend king

Predicting precisely the place share costs will go within the subsequent few days or months is a idiot’s errand. So, let me depart you with one undeniable fact that’s in all probability been ignored amid all this deal with the share price: BAE Techniques has been and stays a superb supply of rising dividends.

Positive, any earnings from the inventory market can by no means be assured. But when it might probably nab only a portion of the multi-billion pound contracts being mooted by analysts, I’m struggling to see why this type received’t proceed. That ought to present some compensation to holders if the shares had been to (quickly) give up a few of their current positive aspects.

Consequently, I nonetheless assume BAE Techniques is worthy of consideration as a part of a diversified portfolio.