FTSE 100 utilities have been relatively resilient so far this year in a volatile stock market. And I think there’s a good chance that might be set to continue for the next few months.
In an uncertain market (and world) the stable cash flows utilities companies can offer are attractive. But is this the right time to think about buying them?
Safety
In the last few years, investors have used tech companies like Microsoft for protection from stock market volatility. But that hasn’t worked so far in 2026.
The concern is what artificial intelligence (AI) means for the likes of Microsoft. It’s still not clear, which means the firm’s cash flows are less predictable than usual.
As a result, the stock is down 15% since the start of the year. That’s worse than the wider S&P 500, so it isn’t exactly offering investors protection from the wider volatility.
From the FTSE 100, the likes of National Grid have been attracting a lot of attention. Reliable demand combined with a favourable regulatory environment has sent the stock up in 2026.
Investors who are concerned about share prices in the next few weeks or months might want to take a look. But I’m not sure this is the best way to approach the stock market.
Anything can happen with just about any stock in the near term and that makes putting cash into equities risky over a short time horizon. But over the long term, things are quite different.
Long-term investing
Anything can happen over a period of weeks or months, but the best returns tend to come from the strongest businesses sooner or later. And that’s the advantage of long-term investing.
That means short-term safety is hard to find. But over a longer time period, owning shares in a company that’s performing well and going to keep doing so should provide reassurance.
From this perspective, Rentokil Initial (LSE:RTO) is a stock that I think is worth considering right now. It’s the leading company in a growing market and I like that combination a lot.
Does that mean the stock can’t go down? Absolutely not – the company’s debt is unusually high at the moment after a big acquisition and this has been weighing on the share price recently.
Over the long term, though, there are lots of reasons to be positive. One consequence of climate change is better breeding conditions for insects, which is what the firm deals with.
I doubt that people’s tolerance for infestations is going to go up in future, so this should mean strong demand. And with the largest scale, Rentokil has a key advantage over competitors.
Stock market safety
Investors should be very wary about having money in the stock market that they’re going to need in the next few weeks or months. Unpredictable share prices make this very risky.
For those who are willing to wait it out, though, things are very different. There are lots of businesses that have good long-term prospects and this tends to come to the fore eventually.
Interestingly, I saw recently that Berkshire Hathaway has acquired a pest control firm. So I’m in good company with my view that this is an industry that’s worth checking out right now.
