Stability is great, but low-volatility stocks may struggle to deliver market-beating returns over time as they sometimes underperform during bull markets.
Luckily for you, StockStory helps you navigate which companies are truly worth holding. Keeping that in mind, here are three low-volatility stocks to steer clear of and a few better alternatives.
Tenable (TENB)
Rolling One-Year Beta: 0.85
Founded in 2002 by three cybersecurity veterans, Tenable (NASDAQ: TENB) provides software as a service that helps companies understand where they are exposed to cyber security risk and how to reduce it.
Why Is TENB Not Exciting?
- Annual revenue growth of 16.9% over the last three years was below our standards for the software sector
- Estimated sales growth of 7.5% for the next 12 months implies demand will slow from its three-year trend
- Historical operating losses point to an inefficient cost structure
Tenable is trading at $32.35 per share, or 4x forward price-to-sales. Dive into our free research report to see why there are better opportunities than TENB.
Yum China (YUMC)
Rolling One-Year Beta: 0.63
One of China’s largest restaurant companies, Yum China (NYSE: YUMC) is an independent entity spun off from Yum! Brands in 2016.
Why Are We Wary of YUMC?
- Disappointing same-store sales over the past two years show customers aren’t responding well to its menu offerings and dining experience
- Anticipated sales growth of 4.2% for the next year implies demand will be shaky
- Lacking pricing power results in an inferior gross margin of 20.1% that must be offset by turning more tables
Yum China’s stock price of $46.91 implies a valuation ratio of 17.1x forward P/E. To fully understand why you should be careful with YUMC, check out our full research report (it’s free).
Supernus Pharmaceuticals (SUPN)
Rolling One-Year Beta: 0.37
With a diverse portfolio of eight FDA-approved medications targeting neurological conditions, Supernus Pharmaceuticals (NASDAQ: SUPN) develops and markets treatments for central nervous system disorders including epilepsy, ADHD, Parkinson's disease, and migraine.
Why Should You Sell SUPN?
- Products and services are facing end-market challenges during this cycle, as seen in its flat sales over the last two years
- Revenue base of $668 million puts it at a disadvantage compared to larger competitors exhibiting economies of scale
- Shrinking returns on capital from an already weak position reveal that neither previous nor ongoing investments are yielding the desired results
At $31.54 per share, Supernus Pharmaceuticals trades at 15.3x forward P/E. Read our free research report to see why you should think twice about including SUPN in your portfolio.
High-Quality Stocks for All Market Conditions
The market surged in 2024 and reached record highs after Donald Trump’s presidential victory in November, but questions about new economic policies are adding much uncertainty for 2025.
While the crowd speculates what might happen next, we’re homing in on the companies that can succeed regardless of the political or macroeconomic environment. Put yourself in the driver’s seat and build a durable portfolio by checking out 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 176% over the last five years.
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 Kadant (+351% five-year return). Find your next big winner with StockStory today for free.
