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.
Pfizer (PFE)
Rolling One-Year Beta: 0.59
With roots dating back to 1849 when two German immigrants opened a fine chemicals business in Brooklyn, Pfizer (NYSE: PFE) is a global biopharmaceutical company that discovers, develops, manufactures, and sells medicines and vaccines for a wide range of diseases and conditions.
Why Does PFE Worry Us?
- Core business is underperforming as its organic revenue has disappointed over the past two years, suggesting it might need acquisitions to stimulate growth
- 26.5 percentage point decline in its free cash flow margin over the last five years reflects the company’s increased investments to defend its market position
- Eroding returns on capital suggest its historical profit centers are aging
At $25.69 per share, Pfizer trades at 8.6x forward P/E. If you’re considering PFE for your portfolio, see our FREE research report to learn more.
Exponent (EXPO)
Rolling One-Year Beta: 0.64
With a team of over 800 consultants holding advanced degrees in 90+ technical disciplines, Exponent (NASDAQ: EXPO) is a science and engineering consulting firm that investigates complex problems and provides expert analysis for clients across various industries.
Why Is EXPO Not Exciting?
- Sales trends were unexciting over the last two years as its 3.5% annual growth was below the typical business services company
- Performance over the past two years shows its incremental sales were less profitable, as its 1.8% annual earnings per share growth trailed its revenue gains
- Eroding returns on capital suggest its historical profit centers are aging
Exponent’s stock price of $73.60 implies a valuation ratio of 33.9x forward P/E. Dive into our free research report to see why there are better opportunities than EXPO.
Aflac (AFL)
Rolling One-Year Beta: 0.52
Known for its iconic duck mascot that has quacked "Aflac!" in commercials since 2000, Aflac (NYSE: AFL) provides supplemental health and life insurance policies that pay cash benefits directly to policyholders for expenses not covered by their primary insurance.
Why Are We Cautious About AFL?
- Net premiums earned contracted by 6.2% annually over the last five years, showing unfavorable market dynamics this cycle
- Earnings growth over the last two years fell short of the peer group average as its EPS only increased by 9.4% annually
- Projected book value per share is flat for the next 12 months, implying profitability will slow from its two-year trend
Aflac is trading at $108.79 per share, or 2x forward P/B. To fully understand why you should be careful with AFL, check out our full research report (it’s free for active Edge members).
Stocks We Like More
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 5 Strong Momentum 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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