Stability is great, but low-volatility stocks may struggle to deliver market-beating returns over time as they sometimes underperform during bull markets.
Finding the right balance between safety and returns isn’t easy, which is why StockStory is here to help. Keeping that in mind, here are three low-volatility stocks to steer clear of and a few better alternatives.
Flowers Foods (FLO)
Rolling One-Year Beta: 0.16
With Wonder Bread as its premier brand, Flower Foods (NYSE: FLO) is a packaged foods company that focuses on bakery products such as breads, buns, and cakes.
Why Should You Sell FLO?
- Falling unit sales over the past two years suggest it might have to lower prices to stimulate growth
- Anticipated sales growth of 2.9% for the next year implies demand will be shaky
- Earnings per share have contracted by 20.6% annually over the last three years, a headwind for returns as stock prices often echo long-term EPS performance
At $10.90 per share, Flowers Foods trades at 11x forward P/E. If you’re considering FLO for your portfolio, see our FREE research report to learn more.
CVS Health (CVS)
Rolling One-Year Beta: 0.59
With over 9,000 retail pharmacy locations serving as neighborhood health destinations across America, CVS Health (NYSE: CVS) operates retail pharmacies, provides pharmacy benefit management services, and offers health insurance through its Aetna subsidiary.
Why Do We Think Twice About CVS?
- Annual sales growth of 6.4% over the last two years lagged behind its healthcare peers as its large revenue base made it difficult to generate incremental demand
- Performance over the past five years shows its incremental sales were much less profitable, as its earnings per share fell by 2.9% annually
- ROIC of 5.3% reflects management’s challenges in identifying attractive investment opportunities, and its falling returns suggest its earlier profit pools are drying up
CVS Health’s stock price of $79.55 implies a valuation ratio of 11.5x forward P/E. To fully understand why you should be careful with CVS, check out our full research report (it’s free for active Edge members).
Iridium (IRDM)
Rolling One-Year Beta: 0.80
With a constellation of 66 low-earth orbit satellites providing coverage to every inch of the planet, Iridium Communications (NASDAQ: IRDM) operates a global satellite network that provides voice and data services to customers in remote areas where traditional telecommunications are unavailable.
Why Are We Wary of IRDM?
- Estimated sales growth of 2.3% for the next 12 months implies demand will slow from its two-year trend
- Free cash flow margin shrank by 4.8 percentage points over the last five years, suggesting the company is consuming more capital to stay competitive
- Below-average returns on capital indicate management struggled to find compelling investment opportunities
Iridium is trading at $17.13 per share, or 14.4x forward P/E. Dive into our free research report to see why there are better opportunities than IRDM.
Stocks We Like More
If your portfolio success hinges on just 4 stocks, your wealth is built on fragile ground. You have a small window to secure high-quality assets before the market widens and these prices disappear.
Don’t wait for the next volatility shock. Check 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 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-small-cap company Comfort Systems (+782% 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.
