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 steer clear of and a few better alternatives.
Workiva (WK)
Rolling One-Year Beta: 0.70
Nicknamed "the Excel killer" by some finance professionals for its ability to eliminate spreadsheet chaos, Workiva (NYSE: WK) provides a cloud-based platform that enables organizations to streamline financial reporting, ESG, and compliance processes with connected data and automation.
Why Is WK Not Exciting?
- Operating margin failed to increase over the last year, indicating the company couldn’t optimize its expenses
- Capital intensity will likely ramp up in the next year as its free cash flow margin is expected to contract by 1.9 percentage points
Workiva’s stock price of $85.01 implies a valuation ratio of 5.1x forward price-to-sales. To fully understand why you should be careful with WK, check out our full research report (it’s free for active Edge members).
Verizon (VZ)
Rolling One-Year Beta: 0.31
Formed in 1984 as Bell Atlantic after the breakup of Bell System into seven companies, Verizon (NYSE: VZ) is a telecom giant providing a range of communications and internet services.
Why Do We Steer Clear of VZ?
- Underwhelming customer growth over the past two years shows the company faced challenges in winning new contracts
- Demand will likely be soft over the next 12 months as Wall Street’s estimates imply tepid growth of 1.6%
- Incremental sales over the last five years were less profitable as its earnings per share were flat while its revenue grew
Verizon is trading at $39.76 per share, or 8.4x forward P/E. Dive into our free research report to see why there are better opportunities than VZ.
Quest (DGX)
Rolling One-Year Beta: 0.22
Processing approximately one-third of the adult U.S. population's lab tests annually, Quest Diagnostics (NYSE: DGX) provides laboratory testing and diagnostic information services to patients, physicians, hospitals, and other healthcare providers across the United States.
Why Does DGX Give Us Pause?
- Annual sales growth of 5.3% over the last five years lagged behind its healthcare peers as its large revenue base made it difficult to generate incremental demand
- Day-to-day expenses have swelled relative to revenue over the last five years as its adjusted operating margin fell by 9.7 percentage points
- Eroding returns on capital suggest its historical profit centers are aging
At $175.95 per share, Quest trades at 17.3x forward P/E. If you’re considering DGX for your portfolio, see our FREE research report to learn more.
Stocks We Like More
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.
The smart money is already positioning for the next leg up. Don’t miss out on the recovery - check 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-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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