Stability is great, but low-volatility stocks may struggle to deliver market-beating returns over time as they sometimes underperform during bull markets.
Choosing the wrong investments can cause you to fall behind, which is why we started StockStory - to separate the winners from the losers. Keeping that in mind, here are three low-volatility stocks to avoid and some better opportunities instead.
Wabash (WNC)
Rolling One-Year Beta: 0.41
With its first trailer reportedly built on two sawhorses, Wabash (NYSE: WNC) offers semi trailers, liquid transportation containers, truck bodies, and equipment for moving goods.
Why Is WNC Risky?
- Product roadmap and go-to-market strategy need to be reconsidered as its backlog has averaged 32.8% declines over the past two years
- High input costs result in an inferior gross margin of 13.9% that must be offset through higher volumes
- Earnings per share decreased by more than its revenue over the last five years, showing each sale was less profitable
At $9.86 per share, Wabash trades at 10.4x forward P/E. Read our free research report to see why you should think twice about including WNC in your portfolio.
Dun & Bradstreet (DNB)
Rolling One-Year Beta: 0.27
Known for its proprietary D-U-N-S Number that serves as a unique identifier for businesses worldwide, Dun & Bradstreet (NYSE: DNB) provides business decisioning data and analytics that help companies evaluate credit risks, verify suppliers, enhance sales productivity, and gain market visibility.
Why Do We Pass on DNB?
- Muted 3.7% annual revenue growth over the last two years shows its demand lagged behind its business services peers
- Costs have risen faster than its revenue over the last five years, causing its adjusted operating margin to decline by 5 percentage points
- Flat earnings per share over the last four years lagged its peers
Dun & Bradstreet’s stock price of $9.12 implies a valuation ratio of 8.5x forward P/E. If you’re considering DNB for your portfolio, see our FREE research report to learn more.
Aflac (AFL)
Rolling One-Year Beta: 0.46
Known for its iconic duck mascot that has quacked "Aflac!" in commercials since 2000, Aflac (NYSE: AFL) provides supplemental health and life insurance policies that pay cash benefits directly to policyholders for expenses not covered by their primary insurance.
Why Does AFL Give Us Pause?
- Annual net premiums earned declines of 7.8% for the past four years show its policy sales struggled during this cycle
- Demand will likely be soft over the next 12 months as Wall Street’s estimates imply tepid growth of 2.4%
- Earnings per share lagged its peers over the last two years as they only grew by 15% annually
Aflac is trading at $100.65 per share, or 2.1x forward P/B. To fully understand why you should be careful with AFL, check out our full research report (it’s free).
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 5 Growth Stocks for this month. 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-micro-cap company Tecnoglass (+1,754% 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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