British American Tobacco (LSE: BATS) shares plunged 8% in early morning trading (13 February) after the company posted mixed results for the year ending 31 December 2024.

The tobacco giant reported revenue of £25.87bn and an adjusted profit of 362.5p per share. The results slightly missed expectations for revenue of £26.11bn but exceeded the anticipated profit of 362.2p per share.

Overall profitability was impacted by a £6.2bn charge related to a long-standing lawsuit in Canada. The company expects further regulatory challenges in Bangladesh and Australia this year, affecting its combustible tobacco products. Despite these headwinds, CEO Tadeu Marroco reaffirmed his confidence in the company’s business strategy, forecasting modest revenue growth of about 1% towards the second half of 2025.

Additional challenges have arisen in the US. Consumers are frequently opting for cheaper alternative products, specifically illicit disposable vapes. However, British American highlighted a mild recovery in market share and positive developments in its nicotine pouch segment. The profitability of its next-gen products has also improved, with revenues surpassing expectations.

Chief financial officer Soraya Benchikh believes the company’s on track to meet its 2025 outlook of low-single-digit organic revenue and adjusted profit growth. 

“We are committed to maximising sustainable value from our combustibles business while driving growth in our New Categories through innovation and premiumisation,” she said.

Dividend value

With an excellent track record of providing consistent dividends, it’s long been a favourite of British income investors. For decades, it’s maintained a significant market share and continues to expand its diverse product portfolio. The addition of next-gen products positions it well to achieve a meaningful share in the evolving nicotine market.

In recent years, the key attraction for the company is the dividends. While many other stocks maintain a similar yield of around 7%, it’s backed up by decades of growth and reliable payments. In previous years, the stock provided value through capital appreciation but that has changed since 2017.

The price has made little headway in the past five years, up only 1%. In the same period, the yield’s increased almost three-fold. For investors that prefer the consistency of dividend income, it’s clear to see the attraction.

Regulatory concerns

As ever, there are risks to investing in the stock. Regulatory changes remain the key challenge, as they have for years. The tobacco industry faces increasingly stringent restrictions around the world, all of which can impact sales and profitability.

Naturally, such regulations intend to decrease harmful tobacco use, an endeavor that British American recognises as necessary. This is reflected in its costly attempts to transition to next-gen products. Unfortunately, there’s no guarantee such a transition will ever be profitable and the company may continue to lose money.

On top of this, current and future legal cases related to health concerns and environmental issues continue to threaten its financial stability. Some would prefer to see tobacco deemed illegal but, historically, prohibition has seldom led to a sustainable solution.

Ironically, the company may be the one best positioned to reduce any harm it’s responsible for. For income investors positive about a transition to smokeless products, I think the dividend track record alone makes it a stock worth considering.

I’ve been underwhelmed by my Unilever (LSE: ULVR) shares since buying them in 2023 and 2024. Last night, I was sitting on a modest 12% gain and wondering whether I’d find more excitement elsewhere.

When I discovered the Unilever share price had fallen 6.6% this morning I was even less impressed. I’ve got no cash in my trading account. Is dumping Unilever the best way to raise it?

On checking, today’s full-year results weren’t quite as bad as I feared. The FTSE 100 consumer goods giant reported a 12.6% rise in annual profit to €11.2bn, plus a €1.5bn share buyback programme. What’s the problem?

Am I wasting my time with this FTSE 100 stock?

Underlying sales growth came in at 4%, just shy of the 4.1% expected by analysts. Not exactly a disaster, but when a company like Unilever misses modest expectations, investors tend to flip.

The board also warned of a “subdued” first half of the year before things (hopefully) pick up, driven by price increases as higher commodity costs filter through in 2025. 

Unilever has long been a go-to defensive stock. It owns some of the world’s biggest consumer brands that are in millions of homes globally, providing a steady stream of revenue even in uncertain economic times.

Checking performance, I see the Unilever share price has actually climbed 19% over the last year. And that’s after today’s dip. So maybe I’m the one flipping for no reason. However, it’s up just 2% over five years. Performance has been surprisingly volatile for a supposedly defensive stock.

Unilever took its eye off the ball in that time. It became too big, too sprawling. CEO Hein Schumacher has restored focus but I wouldn’t call him transformative.

Also, I worry about the group’s long-term sales trajectory. Even in a good year, revenue growth is modest. 

Growth prospects look modest

Management is guiding for growth of between 3% and 5% in 2025. That’s in line with its historical performance but hardly inspiring. Rivals like Nestlé and Procter & Gamble have grown faster lately.

Then there’s the demerger of its ice-cream division, home to brands like Ben & Jerry’s and Magnum. While this move could unlock value in the long run, it also adds an element of uncertainty. It’s another distraction for management. 

Unilever remains a high-quality company with strong brands and a defensive edge. The dividend yield of 3.3% is decent, but hardly spectacular. Today’s price-to-earnings ratio of just over 21 doesn’t exactly scream bargain.

The 21 analysts offering one-year share price forecasts for Unilever have produced a median target of just over 5,032p. If correct, that’s an increase of around 13% from today. These forecasts would have been produced before today’s dip. They were even lower before.

For now, I’m holding. I don’t want to crystallise a sharp one-day loss. Unilever is likely to recover as bargain seekers emerge. But if an irresistible buying opportunity emerges in the weeks ahead and I still don’t have the cash, Unilever is top of my Sell list.

The appeal of Vodafone (LSE: VOD) shares baffles me. I just don’t get it. Yet plenty do.

At The Motley Fool, we have complete freedom to name the shares we love and the ones we hate. We think debate and disagreement makes us better investors. Plenty of my fellow writers have admired Vodafone over the years. I admire their judgement, but I’m sorry, I still don’t get it.

I didn’t get it 10 years ago, when the Vodafone share price stood at 232p. And I didn’t get it five years ago, when it traded at 155p. Nor three years ago, by which time it had slipped to 137p.

And I certainly didn’t get the appeal 12 months ago, when the stock was down to 64p.

This FTSE 100 stock just drops and drops

Vodafone has just fallen and fallen. It’s been dropping for 25 years, since peaking at 502p in February 2000, at the height of the dot-com frenzy.

I’m staggered that it still has a market cap of £17bn. Or remains a FTSE 100 fixture. Or that somebody hasn’t cried ‘Enough is enough!’ then waded in and broken the business up.

Okay, I know why people like it. They’re captivated by the yield. Vodafone has paid investors a heap of dividends over the years. Last year, it was the highest yielder on the entire FTSE 100, paying income of 11%.

Don’t be misled. Shareholder payouts have been cut twice in six years. In May 2019, the board cut the dividend per share by 40%, from 15.07 euro cents to 9 euro cents. This followed a €7.6bn loss attributed to the sale of Vodafone India, and increased competition in markets like Italy and Spain.

From March, payouts will be halved to just 4.5 euro cents, as part of a broader strategy to streamline operations, reduce debt and invest in key areas such as 5G infrastructure. The dividend has been falling as fast as the shares.

It’s true that the forecast yield still looks pretty good at 5.65%. But only because the shares have fallen so far.

The dividend is crashing too!

Vodafone has spent the entire millennium working off the excesses of the dotcom boom. The latest CEO to give it a whirl, Margherita Della Valle, is driving through her own transition programme, cutting 11,000 jobs (12% of the workforce), offloading the underperforming Spanish and Italian businesses, and merging Vodafone’s mobile operations with Three UK. She’s also pushing Vodafone’s fast-growing B2B division. All this makes sense.

Vodafone remains one of the world’s biggest telecoms groups with €37bn of revenues in fiscal year 2024. It has more than 300m mobile customers and 27m fixed broadband customers. It’s a big deal. Yet size can be more of a burden than a blessing.

Newsflash! Suddenly its shares are rising. They’re up 7.5% in the last month to 69p. Maybe we’ve finally hit turning point.

I still won’t buy Vodafone shares. The board still has to devote too much of its energies to tidying up past mistakes. There are higher yields out there. More reliable ones too. Many of my fellow Fools will disagree. Let’s see who’s right this time.

FTSE 250 budget airline Wizz Air (LSE: WIZZ) has had a torrid time in the past 12 months.

As a result, its share price has dropped 38% from its 12 June traded high of £25.46 over the period.

However, I think the stock might be at a tipping point that may see its valuation surge.

Why is the price down in the first place?

The share price slide began in June on news that 46 of its planes were grounded due to engine issues. That constitutes around a fifth of its fleet.

Consequently, Q1 of its fiscal year 2025 saw operating profit drop 44% year on year to €44.6m (£371.m). The profit forecast for full-year 2025 was cut from €450m to €350m.

This was downgraded again shortly after to €250m and once more in the 30 January Q3 results. The new profit after tax forecast range of €125m-€175m resulted from unrealised foreign exchange losses.

Inadequate currency risk hedging practices and engine problems remain key risks for Wizz Air, in my view.

Where’s my optimism coming from?

The firm signed a new commercial support agreement with engine maker Pratt & Whitney at the end of 2024. This will cover direct costs associated with the aircraft that have been grounded and those expected to be.

Wizz Air additionally expects negotiations over spare engines for its 177 Airbus A321neo planes to be concluded by the end of this quarter.

And it has also approved a new programme to hedge its currency risks.

Positively as well, its Q3 2025 results saw revenue increase 10.5% to €1.18bn. Passenger numbers increased 2.6% to 15.5m and its load factor rose 3% to 90.3%. The higher the load factor, the more efficiently an airline is utilising its seating capacity.

Good for growth is that it is restarting operations into Israel from March. Indeed, expanding its routes and flight frequency is one reason why HSBC upgraded the stock to Buy from Hold on 7 February.

HSBC analysts believe Wizz Air’s strategy of network densification will drive operational efficiencies. 

In fact, consensus analysts’ forecasts are that Wizz Air’s earnings will increase by a stellar 31% a year to end-2027. 

And it is this growth that ultimately drives a firm’s share price higher.

How undervalued is the stock?

On the key price-to-sales relative stock valuation measure, Wizz Air currently trades at just 0.4. This is joint bottom of its key competitors, which average 0.9.

Moreover, a discounted cash flow valuation using other analysts’ figures and my own shows Wizz Air shares are 67% undervalued at their current £15.78 price.

So, the fair value for the stock is technically £47.81. It last reached this price on 11 February 2022, although market vagaries may push it lower or higher, of course.

Is now the time for to buy it?

If I were not towards the latter part of my investment cycle focusing on high-yield stocks I would probably buy Wizz Air shares.

The forecast very high earnings growth should drive the share price higher over time, I think. It should also allow it to start paying dividends at some point.

BT (LSE: BT.A) shares are down 5% from their 2 December 12-month traded high of £1.59. It is a rare dip in a stock that has risen 50% from its £1.01 low recorded exactly a year ago today.

So, is now the right time for me to add to my existing holding in the telecommunications giant?

Why has the stock dipped?

BT posted a 3% year-on-year fall to £5.18bn in its results for Q3 of fiscal 2025 on 30 January. This was sufficient to push the stock down on the day.

However, I think this was more than compensated for by a 4% rise in its adjusted earnings before interest, taxes, depreciation, and amortisation (EBITDA) – to £2.1bn.

Additionally positive for me was a record 472,000 connections to its fibre network in the quarter. Its network now extends to 17m premises and is set to reach 25m by December 2026.

Given these developments, BT retained its full-year 2025 guidance of £8.2bn in adjusted EBITDA compared to £8.1bn last year. Free cash flow (FCF) is expected to be £1.5bn over the period.

It also maintained its forecast that FCF will rise to around £2bn in 2027 and about £3bn by 2030. Such cash reserves can be a powerful engine for growth, in my experience.

A risk here is the high level of competition in the sector that may squeeze its margins.

However, analysts forecast BT’s earnings will increase 17.1% a year to the end of 2027. And it is growth here that ultimately powers a firm’s share price and dividend higher.

Are the shares currently undervalued?

The first part of my BT share price assessment is comparing its key valuations with its competitors.

On the price-to-earnings ratio, it trades at 19.1 against a peer average of 17.4. These companies are Vodafone at 9, Orange at 13.8, Telenor at 19.6, and Deutsche Telekom at 27.3.

So, BT is overvalued on this measure (although it is lower than some peers).

However, it is undervalued on its price-to-book ratio of 1.2 compared to the 1.6 average of its competitors.

And it is also undervalued on the price-to-sales ratio, on which it trades at 0.7 against a 1.2 peer average.

To get to the bottom of its valuation, I used the second element of my price evaluation process. This ascertains where a stock should be trading, based on future cash flow forecasts for a firm.

The resulting discounted cash flow analysis shows BT shares are technically 64% undervalued.

Therefore, the fair price for the stock is £4.19 although market vagaries might push it lower or higher.

The bonus of a good yield

BT paid a dividend last year of 8p, yielding 5.3% on the current share price. This compares to the FTSE 100 average of 3.5% now.

So, investors considering a holding of £11,000 (the average UK savings) in BT would make £7,666 in dividend after 10 years. This would rise to £42,753 after 30 years.

Both results are based on an average yield of 5.3% and on the dividends being reinvested back into the stock.

With the £11,000 stake added, the value of the holding would be £53,753 by 2055. This would pay £2,849 a year in dividend income.

Given the strong projected earnings growth and the solid yield, I will be buying more BT shares very soon.

Shares in businesses that make the things people use every day can be great sources of dividend income. Especially when they have some of the strongest brands in the industry.

Unilever (LSE:ULVR) is one example. And as the stock falls 6% this morning (13 February), the company’s results for Q4 2024 are ones that investors should take a closer look at. 

Growth… sort of

Unilever is a company in transition – it’s been divesting some of its weaker brands to focus on some of its stronger ones. As a result, it reports sales figures that take this into account. 

On this basis, sales growth for the full year came in at 4.2%. And wider margins meant operating were up 12.5% and share buybacks caused earnings per share to grow 14.7%.

That looks very strong, but there is a catch of a sort. In its report for the first half of 2024, Unilever posted growth rates of 17.1% in operating profits and 16.3% in earnings per share.

In other words, growth rates below the top line are still strong. But investors looking at the full-year results should note they’re less strong than they were earlier in the year.

One of the areas where this is most obvious is the Beauty division, which features brands like Dove, Sunsilk, and Vaseline. Sales in this division grew 5.2% in the fourth quarter of 2024. 

That’s not bad. But it’s below the 6.5% average for 2024 and quarterly growth rates in this part of the business have been declining, which is something investors should pay attention to.

Outlook

Across its divisions, Unilever has shown a good ability to increase prices without seeing significant volume declines. That’s the sign of a company with quality brands. 

The firm’s ability to do this, however, isn’t unlimited. And the fact it’s easy for customers to switch to other alternatives if they choose to is a constant risk.

Looking ahead to 2025, the firm is expects sales growth of between 3% and 5%, with further profit increases from widening margins. That’s pretty much in line with my expectations.

The big question is whether or not it’s worth it. The latest decline means the stock trades at a price-to-earnings (P/E) multiple of 18 based on the company’s adjusted numbers. 

As the dividend continues to increase with the share price falling, the yield is set to creep back to 3.5%. That’s the kind of return I think income investors should consider the stock at.

Despite this, I’m not buying the stock right now. I’m keen to see what happens with the firm’s ice cream division in 2025 before taking a view on what to do. 

Ice cream

Unilever is set to spin off its ice cream ops this year, with listings in London, Amsterdam, and New York. And I’m keeping a close eye on this as it develops. 

In recent years divested companies have often struggled out of the gate before going on to do well. So this is where I’m looking for a potential buying opportunity around Unilever this year.

Generating a reliable passive income stream in retirement is a goal for millions. In my view, one of the best ways to achieve this is through a Stocks and Shares ISA.

By selecting the right dividend stocks, it’s possible to build a portfolio capable of delivering an impressive £24,000 a year in tax-free second income. So how much would an investor need to put in to achieve that?

It depends on how much the portfolio yields. Let’s say we targeted 5%, a figure achievable through a carefully selected blend of FTSE 100 and FTSE 250 dividend stocks. That requires a total pot of £480,000.

Someone who built a balanced portfolio of shares with a lower average yield of say 4%, would need £600,000.

A retirement built on dividends

It’s possible to find blue-chips yielding as much as 8% or 9% a year, but I wouldn’t suggest putting an entire portfolio in them. Ultra-high yields can prove unsustainable in the longer run.

Right now, FTSE 100 supermarket J Sainsbury (LSE: SBRY) has a dividend yield of exactly 5%. That’s bang on the nose.

Its forecast to hit 5.2% this year, then 5.4% in 2026. That’s the beauty of a good dividend stock. The board will aim to increase shareholder payouts every year, as profits rise. Assuming profits do rise. No guarantees. On the FTSE 100, Persimmon, Rio Tinto and Vodafone have cut dividends in recent years.

As the UK’s second-largest grocer (after Tesco), Sainsbury’s benefits from consistent consumer demand and a strong market position. I remember eating its own-brand baked beans as far back as the 1970s. Supermarkets are seen as defensive stocks. People still need to eat in economic downturns.

That said, when people have less money in their pockets, they’ll still cut back on food. Plus Sainsbury’s now owns Argos, which has struggled lately, and faces intense competition from Amazon and others.

But with luck, Sainsbury’s investors should get share price growth. The Sainsbury’s price is up just 1.5% over the last year, but a more impressive 30% over five years. All dividends are on top. The total return could be closer to 60%.

Sainsbury’s is well worth considering for a diversified, dividend-focused ISA. But it shouldn’t be the only stock. Personally, I’d aim for 15 to 20 different shares.

Building a diversified portfolio

I’d also diversify across multiple industries. Sectors such as consumer staples, utilities and financials tend to provide reliable dividends. Unilever, National Grid and Legal & General are worth considering.

Reinvesting dividends, at least initially, could accelerate portfolio growth. So how long would it take to save £480,000?

Obviously, that depends on how much the investor pays in. Someone who is 30 years from retirement could hit that target by investing £400 a month. This assumes an average annual total return of 7% a year, with dividends reinvested, roughly in line with the long-term FTSE 100 average.

If they only had 20 years at their disposal, they’d have to up that contribution to £925 a month. No time to lose. To bag passive income, it pays to get active as soon as popssible.

On 5 February, growth stock Warpaint (LSE: W7L) updated the market on its “strong” start to the year. Brilliant, I thought. My shares are going to be flying.

Excited, I logged onto my trading account. Shares in the AIM-listed beauty specialist had already climbed by a third since I bought them last January. I expected more. Then it all went wrong.

The Warpaint share price plunged 20% on the day and has continued to slide. It’s now down 28% since those results. Over 12 months, it’s up just 2%. I’m right back where I started.

Long-term investors can still feel smug. The shares are up 388% over five years, but that’s not much use to me.

The shares have been routed

On 6 December, I proudly declared in these pages that I expected Warpaint would be “on the warpath in 2025”. Instead, it’s on the run.

Its W7 and Technic brands are selling well at Tesco and major retailers in the US and Europe, topped up by online sales from its own site.

February’s update showed the board expects full-year 2024 revenues to have climbed 13.8%, from £89.6m to £102m. Sadly, that was 4% below consensus. That earnings miss hurt.

Investors had priced in more growth with the shares valued at almost 30 times earnings at the end of last year. They’re cheaper today, trading at 22 times.

Other news was better. Pre-tax profits jumped almost 33%, from £18.1m to £24m. Revenue growth accelerated to 15% in January. Not fast enough to convince investors though.

Just three analysts cover Warpaint shares. All rate it a Strong Buy. They’ve set an average target price of 666p over the next year. If that comes off, it would mark a 65% increase from today’s 405p.

One of the more bullish analysts, Berenberg, even raised its target price slightly after the results, from 680p to 700p.

While accepting that revenues felt slightly short, Berenberg saw the share price slump as “an overreaction given our perception of the cyclicality of the slowdown”.

My AIM wasn’t true

It’s sticking with its convictions, citing the “sharp reacceleration in growth” in January and “a significant runway of revenue growth ahead”.

Warpaint’s now integrating the recent £14m acquisition of fellow cosmetics challenger Brand Architekts, which it called an “exciting and relatively low risk opportunity to further bolster growth opportunities”. Let’s hope so.

My big worry when buying the stock was that I’d missed its stellar early surge. Inevitably, I’ve blundered into the slowdown. I’m choked, but still think the market reaction’s been harsh.

My morale has taken a knock and with the cost-of-living crisis dragging on, so have my expectations. If I had some spare cash in my trading account I might throw it at Warpaint. But I’m not selling anything to raise the funds.

Happily, plenty of my other portfolio holdings are on the warpath this year.

Barclays’ (LSE:BARC) shares have delivered a 71% return over the past five years. But that doesn’t tell the whole story. There has been a great deal of turbulence and volatility during the period.

Nonetheless, a £20,000 investment in the bank then would be worth £34,200 today. That’s excluding dividends which would have likely contributed an additional £3,000.

A rollercoaster ride

The journey hasn’t been smooth. Barclays faced significant headwinds between 2020 and 2023, including pandemic-driven volatility, Brexit uncertainties, and the 2023 Silicon Valley Bank (SVB) collapse, which briefly dragged the sector into crisis.

The stock plummeted to a price-to-earnings (P/E) ratio of just 4.5 in early 2023, reflecting extreme pessimism. However, this proved to be a turning point. Barclays’ strategic overhaul —cost-cutting, capital reallocation and business streamlining — began restoring investor confidence.

By mid-2024, shares surged to decade highs, buoyed by falling interest rates and a brighter outlook for UK banks.

Why consider Barclays today?

The macroeconomic picture’s improving. Interest rates are no longer putting unmanageable pressures on customers, and falling rates also allow banks to unwind their strategic hedging practices.

Barclays’ structural hedge, worth more than £200bn, is expected to lock in £3.6bn in net interest income (NII) for 2025, with over 95% secured via executive derivatives. As older hedges (yielding ~1.5%) mature and refinance at current swap rates (~4.1%), Hargreaves Lansdown forecasts a multi-year uplift, adding £700m+ annually through 2026.

The hedge offsets deposit attrition and cushions rate cuts. In Q3 2024 alone, it delivered £1.2bn (66% to Barclays UK). With a 2.5-year average duration, the hedge ensures stable earnings, supporting Barclays’ target of more than 15% return on tangible equity target.

This is complemented by Barclays’ strategic shift, with the business redirecting risk-weighted assets (RWA) towards the most profitable part of the business — UK retail banking.

Barclays UK averaged a return on tangible equity (RoTE) of 19% between 2021-2023 despite only accounting for 21% of the bank’s RWA. Barclays also acquired Tesco’s banking arm in February 2024, further expanding operations in the area.

It isn’t risk-free

Things are definitely looking up for Barclays, and this has been reflected in the surging share price. However, it’s not a risk-free investment. Banks typically reflect the health of the economies they serve, and the UK’s GDP forecast is simply ‘ok’.

What’s more, Trump’s tariff policies, some of which are inflationary, could negatively impact the direction of interest rates in the UK. This could negatively impact the economy, loan demand, and customers’ financial health.

Long-term optimism

Barclays trades with a forward P/E ratio of 8.6, below its 10-year average of 9.1, suggesting room for revaluation. This is reaffirmed by its broader discount to the global finance sector. Moreover, its 2.8% dividend yield and share buyback programme also represent near-term catalysts.

Personally, I’m tempted to buy more, but this stock’s already one of my largest holdings.

Keep away from the FTSE 100 like we would if it was the plague? Maybe there’s a good reason to do so. The UK economy is slowing. Domestic growth looks bleak, downgraded just this week. 

Tariffs might be coming too. President Trump has already slapped them on some of the US’s closest trading partners. Who’s to say the companies over here in the UK won’t be dealing with them next? 

A lot of signs point to the same thing: treat the FTSE 100 like a disease from the 14th century! That’s what it’s easy to think, anyway. 

Climbing up

Ok, back to the real world. A fresh new year filled with an onslaught of doom-mongering newspaper headlines about tariffs and the state of the British economy hasn’t actually harmed the Footsie. On the contrary, it’s been ripping through one record high after another. 

The barriers of 8,500 then 8,600 then 8,700 all fell in quick succession. The day I write this (12 February) it finished at 8,808!

What’s going on here? Could all the doom and gloom be misplaced? Is the FTSE 100 gearing up for a rip-roaring bull run?

Let’s start by explaining what happened thanks to the peculiarity of the FTSE 100. For one, it’s somewhat detached from the UK as a whole. 

Yes, every company is listed on the London Stock Exchange, operations are managed within our borders and there’ll be an HQ somewhere with a British-sounding name. 

But these are mostly huge, international enterprises. Across the index, 75% of revenues are drawn globally. That’s a huge amount of global diversification a fact that sometimes gets overlooked.

Global revenue means global currency, which these days is the dollar. Indeed, a number of Footsie firms report in dollars.

The key detail here is that the dollar has been climbing since last September. Hence, the FTSE 100  has been climbing too. 

Tariff threats

A second important detail is the services-based nature of the index. Take HSBC, for instance. The bank does a large amount of business abroad, particularly in Hong Kong, China and the US, which reduces its reliance on what’s going on over here.

But HSBC sells services rather than physical products. Without importing or exporting anything the looming trade war isn’t a major concern (although exceptional circumstances may change this). As a result, HSBC shares have been mostly unaffected by the talk and are up around 40% since last August. 

Much of the FTSE 100 is in the same boat and could make it an interesting place for any would-be investor to consider. It should come as no surprise really, it’s long been known as a defensive index. 

As for HSBC, its above-average dividend yield of 5.68% looks enticing although its reliance on China and its economy to sustain revenues could be a concern. Personally, I have enough exposure to the banking sector for me to buy in today. But I think it could be worth investors considering.