Two FTSE 100 shares that reside on my buy list are BAE Systems (LSE: BA.) and National Grid (LSE: NG.).

I’m unable to buy all the stocks I’d like to. However, putting money aside each month allows me to invest regularly. I hope to be able to buy some of these shares soon.

Defence giant

BAE Systems is one of the largest defence businesses in the world. Business has been good due to increased geopolitical volatility. However, I must make it clear I’m an advocate for peace and hope all conflicts come to a speedy and peaceful resolution soon. Plus, there’s more to defence spending than weapons, cybersecurity being a prime example.

The shares have risen 28% over a 12-month period from 1,010p at this time last year, to current levels of 1,298p.

Research undertaken by Statista shows that defence spending is currently at all-time highs. This is good news for BAE, and could translate into boosted earnings and shareholder value. The firm’s vast presence, sticky relationships with the world’s major governments, and track record put it in a good place.

As defence spending continues, to record global levels of $2.4trn last year, BAE’s own order book has reached close to £60bn. This could help revenues remain stable for some time.

From a fundamental view, a dividend yield of 2.4% is attractive, and could grow. However dividends are never guaranteed. Plus, the shares trade on a price-to-earnings ratio of around 22. This isn’t the cheapest, and perhaps some growth is priced in, which is a risk I’ll keep an eye on. Dwindling trading momentum could hurt this. However, to paraphrase Warren Buffett, it’s OK to pair a fair price for a wonderful company.

Despite my bullish stance, another risk I’d keep an eye on is the ongoing risk of product failure or malfunction. This is the case for any product-based business. However, due to the critical nature of BAE’s products, any issues could be costly, and harm investor sentiment.

Keeping the lights on

The owner and operator of the electricity transmission system in the UK is arguably the most defensive stock on the market in my view. This is because no matter the economic outlook, everyone needs power.

National Grid shares have increased 14% over a 12-month period, from 890p at this time last year, to current levels of 1,021p.

They would have risen more, but a dividend cut a couple of months ago sent the price downwards. However, it is on the way back up towards pre-dip levels.

This leads me nicely on to the risks involved with National Grid. Previously seen as a good dividend stock, the cut was to pay for future investment into the grid. This could happen again. Plus, further expenditure will be needed for future green initiatives too. The other issue is that the government could intervene to curb payouts as well.

Overall, a dividend yield of 6% is still attractive to help build wealth. Plus, the share price correction has led the shares to trade on a P/E ratio of just 10, which is an enticing entry point.