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 are three low-volatility stocks that don’t make the cut and some better opportunities instead.
Donaldson (DCI)
Rolling One-Year Beta: 0.91
Playing a vital role in the historic Apollo 11 mission, Donaldson (NYSE: DCI) manufacturers and sells filtration equipment for various industries.
Why Does DCI Fall Short?
- Organic sales performance over the past two years indicates the company may need to make strategic adjustments or rely on M&A to catalyze faster growth
- Estimated sales growth of 3.2% for the next 12 months is soft and implies weaker demand
- Free cash flow margin dropped by 2.8 percentage points over the last five years, implying the company became more capital intensive as competition picked up
Donaldson is trading at $82.61 per share, or 20.9x forward P/E. Dive into our free research report to see why there are better opportunities than DCI.
Unum Group (UNM)
Rolling One-Year Beta: 0.92
Tracing its roots back to 1848 when financial security for workers was virtually non-existent, Unum Group (NYSE: UNM) provides workplace financial protection benefits including disability, life, accident, critical illness, dental and vision insurance primarily through employers.
Why Do We Think Twice About UNM?
- Net premiums earned only expanded by 2.8% annually over the last five years, trailing its insurance peers as its scale limited incremental business
- Estimated sales growth of 1.9% for the next 12 months implies demand will slow from its two-year trend
- Earnings growth underperformed the sector average over the last two years as its EPS grew by just 9.7% annually
At $79.42 per share, Unum Group trades at 1.2x forward P/B. Check out our free in-depth research report to learn more about why UNM doesn’t pass our bar.
Annaly Capital Management (NLY)
Rolling One-Year Beta: 0.67
Operating as a real estate investment trust since 1996 with a focus on generating income from interest rate spreads, Annaly Capital Management (NYSE: NLY) is a diversified capital manager that invests in agency mortgage-backed securities, residential mortgage loans, and mortgage servicing rights.
Why Do We Steer Clear of NLY?
- Annual sales declines of 22% for the past five years show its products and services struggled to connect with the market during this cycle
- Falling earnings per share over the last five years has some investors worried as stock prices ultimately follow EPS over the long term
- Annual tangible book value per share declines of 11.1% for the past five years show its capital management struggled during this cycle
Annaly Capital Management’s stock price of $20.75 implies a valuation ratio of 1.1x forward P/B. Read our free research report to see why you should think twice about including NLY in your portfolio.
Stocks We Like 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 6 Stocks for this week. 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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