Image source: Getty Images The FTSE 100 continues to flirt with its all-time high of 7,903.50 points, set back in 2018. Yet despite this elevated level, I reckon the UK blue-chip index still offers great value. It contains many stocks that I think have the potential to pay me regular and reliable passive income. Here’s one top FTSE 100 stalwart that looks a solid candidate for my portfolio right now. Top performer Defence contractor BAE Systems (LSE: BA.) was the top-performing FTSE 100 stock in 2022. It delivered an exceptional 55% return. This rise was sparked by Russia’s invasion of Ukraine, which caused a massive increase in demand for the firm’s military hardware offerings. Yet, despite this rise, the stock still sports a healthy dividend yield of 3.1%. Sure, that’s below the FTSE 100 average yield of 3.5%. But the firm is in a very strong financial position to continue raising its dividend from here. It has over £2bn in cash sat on the balance sheet and a bulging order book. The company’s total payout this year is expected to be 26.5p per share. Better still, the dividend is tipped to rise to 28.3p next year. That would give it a yield of 3.4%, as things stand. I actually expect the company’s dividend to increase for many years based on its growing order book. These defence contracts are naturally spread across many years, giving management great visibility into future earnings. Risk Of course, that’s not to say the dividend couldn’t be cut unexpectedly. Indeed, that’s what happened in 2020 when the pandemic caused the defence giant to defer its dividend. Another outbreak of Covid could similarly disrupt its operations again. However, BAE Systems has increased its dividend payout nine times over the past 10 years. And it can afford to continue doing so, as next year’s forecast dividend is covered by two times by expected earnings. So the payout looks safe to me, making this defence stock a great choice to drip-feed money into for a growing stream of passive income. £500 a year in passive income One BAE share is 849p, as I write. That means I’d need approximately 1,900 shares to generate £500 a year in passive income. That would cost me around £16,100. Now, obviously that’s a sizeable amount of money. I’m not able to fork out that kind of cash straight away. But that doesn’t mean I couldn’t buy a few shares a week and gradually work my way towards that figure. For example, if I bought nine BAE shares every seven days, that would cost me £76 a week (as things stand). That’s obviously much more affordable. And if I did that consistently every week for one year, I’d end up with 468 shares. They’d pay me £125 annually. After a little over four years, I’d have around 1,900 shares, which would pay me over £500 in annual passive income. If the company raises its dividend, my passive income would increase. Of course, the share price won’t stand still. There’ll be the natural up-and-down gyrations of the stock market. But drip-feeding my money in every week would smooth out these bumps. As always, the main ingredients for this would be time, patience, and consistency.
