A stock with low volatility can be reassuring, but it doesn’t always mean strong long-term performance. Investors who prioritize stability may miss out on higher-reward opportunities elsewhere.
Finding the right balance between safety and returns isn’t easy, which is why StockStory is here to help. That said, here is one low-volatility stock that could succeed under all market conditions and two that may not deliver the returns you need.
Two Stocks to Sell:
Lennar (LEN)
Rolling One-Year Beta: 0.57
One of the largest homebuilders in America, Lennar (NYSE: LEN) is known for constructing affordable, move-up, and retirement homes across a range of markets and communities.
Why Do We Pass on LEN?
- Product roadmap and go-to-market strategy need to be reconsidered as its backlog has averaged 19.2% declines over the past two years
- Free cash flow margin shrank by 11.9 percentage points over the last five years, suggesting the company is consuming more capital to stay competitive
- Unfavorable liquidity position could lead to additional equity financing that dilutes shareholders
At $118.29 per share, Lennar trades at 13.7x forward P/E. Check out our free in-depth research report to learn more about why LEN doesn’t pass our bar.
Bank of Hawaii (BOH)
Rolling One-Year Beta: 0.84
Founded in 1897 as a financial anchor for the newly annexed Hawaiian territory, Bank of Hawaii (NYSE: BOH) is a financial institution providing banking, investment, and insurance services primarily to customers in Hawaii, Guam, and other Pacific Islands.
Why Is BOH Not Exciting?
- Net interest income stagnated over the last five years and signal the need for new growth strategies
- Net interest margin of 2.2% reflects its high servicing and capital costs
- Earnings per share decreased by more than its revenue over the last two years, showing each sale was less profitable
Bank of Hawaii’s stock price of $63.15 implies a valuation ratio of 1.7x forward P/B. To fully understand why you should be careful with BOH, check out our full research report (it’s free for active Edge members).
One Stock to Watch:
Home Bancshares (HOMB)
Rolling One-Year Beta: 0.92
Founded in Conway, Arkansas in 1998 and growing through strategic acquisitions across the Southeast, Home Bancshares (NYSE: HOMB) operates as the bank holding company for Centennial Bank, providing commercial and retail banking services to businesses and individuals across multiple states.
Why Are We Positive On HOMB?
- Differentiated product suite is reflected in its Strong performance of its loan book results in a High-yielding loan book and low cost of funds are reflected in its stellar net interest margin of 4.3%
- Earnings per share have comfortably outperformed the peer group average over the last two years, increasing by 0.5% annually
- Impressive 8.4% annual tangible book value per share growth over the last five years indicates it’s building equity value this cycle
Home Bancshares is trading at $27.25 per share, or 1.3x forward P/B. Is now a good time to buy? See for yourself in our full research report, it’s free for active Edge members.
Stocks We Like Even More
Trump’s April 2025 tariff bombshell triggered a massive market selloff, but stocks have since staged an impressive recovery, leaving those who panic sold on the sidelines.
Take advantage of the rebound 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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