Safe stock for scary times

Riots on the streets on London, riots on the streets of Birmingham – riots just about everywhere. Prisons are filling up; magistrates courts are working through the night. For most firms, a less safe world is bad news, but not so for G4S, the security giant formed from the merger of Securicor and G4 in 2004.

Yesterday, it reported a strong set of first half results, with pre-tax profits of £149m and revenues of £3.76bn both ahead of expectations. With more prisoners to transport and a heightened state of security for firms, both in response to unrest and the forthcoming Olympics, G4S is unsurprisingly upbeat about the future.

Investing in equities is also a risky business these days, but G4S shares are a safe bet. The firm offers the kind of defensiveness you’d expect from a utility, along with the kinds of growth prospects you wouldn't.

Its new markets division, which covers China, the Middle East and India, grew organic revenues by nine per cent in the first half, for example, compared to growth of three per cent in developed markets. New markets now represent some 29 per cent of turnover and management have set a target of eventually earning half of revenues from these countries.

Analysts at BNP yesterday said the shares were at least 60p too cheap. A safe stock for scary times.