Image source: Getty Images
No stock is truly crash-proof. When the chips are down, even the largest and most stable of UK companies can see their share prices suffer as (some) investors dash for the exits. But a few FTSE 100 stocks might prove more resistant than most if/when the next big drop comes.
Today, I’ll touch on three examples that cautious Fools might wish to consider buying in the good times — arguably right now — in preparation for the bad.
Always needed
A characteristic of defensive businesses is that they do something ‘essential’. National Grid (LSE: NG) fits the bill nicely.
Regardless of what’s going on in the economy, we all need access to electricity and gas. And it’s this predictable demand that has allowed the share price to slowly appreciate over the long term. It’s also meant consistent dividends.
This is not to say that the latter are always growing. Last year’s payment, for example, was ‘rebased’ after the Grid sold a whole heap of shares and put the money towards upgrading its infrastructure. This shocked holders at the time, underlining the point that one should never take any income stream for granted.
However, the fact that the shares have since recovered helps to underline the Grid’s robustness. The yield also stands at a very respectable 4.7%, as I type.
Bursting with brands
A second defensive company that could weather the next storm better than most is consumer goods giant Unilever (LSE: ULVR). After all, it owns a huge number of branded products that people purchase habitually, from Domestos to Horlicks to Ben and Jerry’s.
Of course, one easy-to-spot risk here is that a proportion of people will cut back in tough economic times and look for cheaper alternatives. That’s certainly a valid concern in the short term. But we also know that consumers usually return to previous behaviours when confidence bounces back.
Longer term, analysts are sceptical about Unilever’s ability to meet its own growth targets. But remember that we’re interested in a company’s toughness here, rather than its ability to deliver massive capital gains. Not being the next highly-speculative AI bet might actually turn out to be a blessing when markets stagger.
Unilever also scores well when it comes to returning rising amounts of cash to owners. The 3.3% yield is on par with the average across the index.
Defensive demon
For even more diversification, I think GSK (LSE: GSK) warrants attention.
This might seem a strange pick — the share price is down 10% in the last 12 months. No doubt some of this is related to Donald Trump’s threat to slap tariffs on pharmaceutical imports. Ongoing jitters about management’s ability to deliver on an ambitious drug pipeline have probably contributed too.
But, again, I think GSK’s attractions outweigh its issues. Aside from operating in a highly defensive sector (everyone needs healthcare at some point, especially as populations age), revenue and profit have been moving in the right direction in 2025. Debt has roughly halved since 2016. There’s a 4.4% yield as well.
And with shares trading at a price-to-earnings (P/E) ratio of just nine — the average in the index is around the mid-teens — I reckon GSK offers potentially spectacular value if that pipeline eventually bears a sufficient amount of fruit.
This story originally appeared on Motley Fool
