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 that don’t make the cut and some better opportunities instead.
Mohawk Industries (MHK)
Rolling One-Year Beta: 0.91
Established in 1878, Mohawk Industries (NYSE: MHK) is a leading producer of floor-covering products for both residential and commercial applications.
Why Are We Out on MHK?
- 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
- Free cash flow margin is not anticipated to grow over the next year
- Waning returns on capital from an already weak starting point displays the inefficacy of management’s past and current investment decisions
Mohawk Industries’s stock price of $114.37 implies a valuation ratio of 11x forward P/E. If you’re considering MHK for your portfolio, see our FREE research report to learn more.
Scorpio Tankers (STNG)
Rolling One-Year Beta: 0.76
Operating one of the youngest fleets in the industry, Scorpio Tankers (NYSE: STNG) is an international provider of marine transportation services, specializing in the shipment of refined petroleum.
Why Are We Cautious About STNG?
- Products and services are facing significant end-market challenges during this cycle as sales have declined by 2.9% annually over the last five years
- Number of total vessels has disappointed over the past two years, indicating weak demand for its offerings
- Earnings per share have contracted by 37.6% annually over the last two years, a headwind for returns as stock prices often echo long-term EPS performance
At $59.20 per share, Scorpio Tankers trades at 9.9x forward P/E. Dive into our free research report to see why there are better opportunities than STNG.
Assured Guaranty (AGO)
Rolling One-Year Beta: 0.52
Serving as a financial safety net for over $11 trillion in debt service payments since its founding in 2003, Assured Guaranty (NYSE: AGO) provides credit protection products that guarantee scheduled payments on municipal bonds, infrastructure projects, and structured finance obligations.
Why Do We Think AGO Will Underperform?
- Net premiums earned contracted by 3.6% annually over the last five years, showing unfavorable market dynamics this cycle
- Sales are projected to tank by 20.2% over the next 12 months as its demand continues evaporating
- Underwhelming 7.8% return on equity reflects management’s difficulties in finding profitable growth opportunities
Assured Guaranty is trading at $90.68 per share, or 0.7x forward P/B. Check out our free in-depth research report to learn more about why AGO doesn’t pass our bar.
High-Quality Stocks for All Market Conditions
The market’s up big this year - but there’s a catch. Just 4 stocks account for half the S&P 500’s entire gain. That kind of concentration makes investors nervous, and for good reason. While everyone piles into the same crowded names, smart investors are hunting quality where no one’s looking - and paying a fraction of the price. Check out the high-quality names we’ve flagged in 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 244% over the last five years (as of June 30, 2025).
Stocks that made our list in 2020 include now familiar names such as Nvidia (+1,326% between June 2020 and June 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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