Low-volatility stocks may offer stability, but that often comes at the cost of slower growth and the upside potential of more dynamic companies.
Choosing the wrong investments can cause you to fall behind, which is why we started StockStory - to separate the winners from the losers. That said, here are three low-volatility stocks to avoid and some better opportunities instead.
La-Z-Boy (LZB)
Rolling One-Year Beta: 0.70
The prized possession of every mancave, La-Z-Boy (NYSE: LZB) is a furniture company specializing in recliners, sofas, and seats.
Why Do We Think LZB Will Underperform?
- Sales tumbled by 5.3% annually over the last two years, showing consumer trends are working against its favor
- Anticipated sales growth of 2.1% for the next year implies demand will be shaky
- Waning returns on capital imply its previous profit engines are losing steam
La-Z-Boy is trading at $36 per share, or 11.8x forward P/E. To fully understand why you should be careful with LZB, check out our full research report (it’s free).
Masco (MAS)
Rolling One-Year Beta: 0.75
Headquartered just outside of Detroit, MI, Masco (NYSE: MAS) designs and manufactures home-building products such as glass shower doors, decorative lighting, bathtubs, and faucets.
Why Are We Out on MAS?
- Core business is underperforming as its organic revenue has disappointed over the past two years, suggesting it might need acquisitions to stimulate growth
- Sales are projected to be flat over the next 12 months and imply weak demand
- Eroding returns on capital suggest its historical profit centers are aging
Masco’s stock price of $65.91 implies a valuation ratio of 15.2x forward P/E. Check out our free in-depth research report to learn more about why MAS doesn’t pass our bar.
CNA Financial (CNA)
Rolling One-Year Beta: 0.45
With roots dating back to 1853 and majority ownership by Loews Corporation, CNA Financial (NYSE: CNA) is a commercial property and casualty insurance provider offering coverage for businesses, including professional liability, surety bonds, and specialized risk management services.
Why Do We Pass on CNA?
- Scale is a double-edged sword because it limits the company’s growth potential compared to its smaller competitors, as reflected in its below-average annual revenue increases of 6.9% for the last five years
- Earnings per share lagged its peers over the last two years as they only grew by 8.3% annually
- Book value per share was flat over the last five years, indicating it’s failed to build equity value this cycle
At $44.17 per share, CNA Financial trades at 0.8x forward price-to-sales. Read our free research report to see why you should think twice about including CNA in your portfolio.
Stocks We Like More
The market surged in 2024 and reached record highs after Donald Trump’s presidential victory in November, but questions about new economic policies are adding much uncertainty for 2025.
While the crowd speculates what might happen next, we’re homing in on the companies that can succeed regardless of the political or macroeconomic environment. Put yourself in the driver’s seat and build a durable portfolio by checking out our Top 9 Market-Beating Stocks. This is a curated list of our High Quality stocks that have generated a market-beating return of 183% over the last five years (as of March 31st 2025).
Stocks that made our list in 2020 include now familiar names such as Nvidia (+1,545% between March 2020 and March 2025) as well as under-the-radar businesses like the once-small-cap company Exlservice (+354% five-year return). Find your next big winner with StockStory today for free. Find your next big winner with StockStory today. Find your next big winner with StockStory today
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