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As someone looking to build a long-term passive income, I tend to like defensive stocks that can deliver steady(ish) revenue and earnings even when consumer confidence takes a hit.
Finding high-quality defensive shares can sometimes be challenging. There are plenty of companies in the FTSE 100 Index operating in non-cyclical sectors. However, investors usually have to pay more for the privilege of lower cyclical risk that comes from owning these.
That said, I’ve picked out three big names that I think other passive income investors should be considering in 2025.
GSK
Pharma heavyweight GSK (LSE: GSK) has been a steady presence on my watchlist ever since the Haleon spin-off in 2025 gave it a sharper focus on medicines and vaccines. The half-year results for the period ended 30 June showed revenue growth across its key divisions, as the company pushes towards the upper end of its guidance range in FY26.
Right now, the shares are offering a dividend yield of 4.5%, which is above average for the Footsie. Its price-to-earnings (P/E) ratio is sitting at 16.8, suggesting to me the valuation isn’t overly stretched compared to other big healthcare names.
With a market cap north of £50bn, it’s one of the index’s true heavyweights and I think that scale could help it ride out bumps like trade tariffs better than smaller peers.
That said, patent expiries and ligitation risks are always something to consider. For example, GSK is facing an ongoing class action following its Zantac settlement, while its HIV drug Dolutegravir patent is due to expire in 2029. These create some medium-term uncertainty.
Unilever
Unilever (LSE: ULVR) is an enormous global conglomerate whose brands, including Dove and Ben & Jerry’s, feature heavily in my day-to-day life. I think its diversified portfolio across multiple end markets gives it strong defensive qualities despite being consumer-facing.
Cost inflation has been a challenge, so I’ll be watching margins to see if it can keep passing price rises onto customers. Economic weakness could also dent sales if consumers cut back.
Still, Unilever has been a leader in its space for decades and proven adept at navigating challenges. The 3.4% dividend yield is solid if roughly in line with the broader Footsie. A P/E of 23 isn’t cheap, but I see that as the premium investors pay for size, diversification, and steady payouts.
British American Tobacco
British American Tobacco (LSE: BATS) is, in my view, the Footsie’s income behemoth. The yield — around 5.6% as I write on 8 August — is funded by substantial cash flows from traditional products, while its ‘next-generation’ portfolio is adding a bigger chunk to sales.
A P/E ratio of 11.5 is below the Footsie average and my other two picks, which tells me the market is pricing in plenty of caution around the risks posed by regulation and long-term demand trends. With a £92bn market cap, its size adds to its defensive qualities, even in a tough industry.
Final thoughts
None of these are slam-dunk buys — nothing in investing is — but GSK, Unilever, and British American Tobacco have all caught my eye this year for blending decent yields with sectors that, in my opinion, tend to be steadier than most.
While I’m not currently a shareholder, I think they could be worth a look for passive investors like me, particularly if the economy weakens and more cyclical stocks begin to underperform.
This story originally appeared on Motley Fool
