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. Keeping that in mind, here are three low-volatility stocks that don’t make the cut and some better opportunities instead.
Simply Good Foods (SMPL)
Rolling One-Year Beta: 0.62
Best known for its Atkins brand that was inspired by the popular diet of the same name, Simply Good Foods (NASDAQ: SMPL) is a packaged food company whose offerings help customers achieve their healthy eating or weight loss goals.
Why Does SMPL Worry Us?
- Revenue base of $1.46 billion puts it at a disadvantage compared to larger competitors exhibiting economies of scale
- Estimated sales growth of 1.5% for the next 12 months implies demand will slow from its three-year trend
- Free cash flow margin shrank by 5.5 percentage points over the last year, suggesting the company is consuming more capital to stay competitive
Simply Good Foods is trading at $29.40 per share, or 14.6x forward P/E. Dive into our free research report to see why there are better opportunities than SMPL.
Chemed (CHE)
Rolling One-Year Beta: 0.34
With a unique business model combining end-of-life care and household services, Chemed (NYSE: CHE) operates two distinct businesses: VITAS, which provides hospice care for terminally ill patients, and Roto-Rooter, which offers plumbing and water restoration services.
Why Are We Hesitant About CHE?
- Annual revenue growth of 4.4% over the last five years was below our standards for the healthcare sector
- Costs have risen faster than its revenue over the last five years, causing its adjusted operating margin to decline by 2.7 percentage points
- Eroding returns on capital suggest its historical profit centers are aging
Chemed’s stock price of $456 implies a valuation ratio of 18.2x forward P/E. If you’re considering CHE for your portfolio, see our FREE research report to learn more.
CNO Financial Group (CNO)
Rolling One-Year Beta: 0.89
Rebranded from Conseco in 2010 to signal a fresh start after navigating financial challenges, CNO Financial Group (NYSE: CNO) develops and markets health insurance, annuities, and life insurance products primarily targeting middle-income pre-retirees and retirees.
Why Does CNO Fall Short?
- Stagnant net premiums earned over the last five years suggest the firm needs alternative growth strategies
- Expenses have increased as a percentage of revenue over the last four years as its pre-tax profit margin fell by 7.3 percentage points
- Book value per share tumbled by 4.9% annually over the last five years, showing insurance sector trends are working against its favor during this cycle
At $39 per share, CNO Financial Group trades at 1.4x forward P/B. Check out our free in-depth research report to learn more about why CNO doesn’t pass our bar.
High-Quality Stocks for All Market Conditions
Donald Trump’s April 2025 "Liberation Day" tariffs sent markets into a tailspin, but stocks have since rebounded strongly, proving that knee-jerk reactions often create the best buying opportunities.
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