A stock with low volatility can be reassuring, but it doesn’t always mean strong long-term performance. Investors who prioritize stability may miss out on higher-reward opportunities elsewhere.

Choosing the wrong investments can cause you to fall behind, which is why we started StockStory - to separate the winners from the losers. That said, here is one low-volatility stock providing safe-and-steady growth and two that may not deliver the returns you need.

Two Stocks to Sell:

GATX (GATX)

Rolling One-Year Beta: 0.86

Originally founded to ship beer, GATX (NYSE: GATX) provides leasing and management services for railcars and other transportation assets globally.

Why Are We Hesitant About GATX?

1. Performance surrounding its active railcars has lagged its peers
2. Free cash flow margin shrank by 32.2 percentage points over the last five years, suggesting the company is consuming more capital to stay competitive
3. 9× net-debt-to-EBITDA ratio makes lenders less willing to extend additional capital, potentially necessitating dilutive equity offerings

GATX’s stock price of $153.38 implies a valuation ratio of 17x forward P/E. Check out our free in-depth research report to learn more about why GATX doesn’t pass our bar.

Champion Homes (SKY)

Rolling One-Year Beta: 0.82

Founded in 1951, Champion Homes (NYSE: SKY) is a manufacturer of modular homes and buildings in North America.

Why Are We Cautious About SKY?

1. Underwhelming unit sales over the past two years imply it may need to invest in improvements to get back on track
2. Earnings per share have dipped by 28.9% annually over the past two years, which is concerning because stock prices follow EPS over the long term
3. Shrinking returns on capital suggest that increasing competition is eating into the company’s profitability

Champion Homes is trading at $60.37 per share, or 15.3x forward P/E. Read our free research report to see why you should think twice about including SKY in your portfolio.

One Stock to Buy:

PennyMac Financial Services (PFSI)

Rolling One-Year Beta: 0.24

Founded during the 2008 financial crisis to help address the mortgage market meltdown, PennyMac Financial Services (NYSE: PFSI) is a specialty financial services company that originates, services, and manages investments related to residential mortgage loans in the United States.

Why Should You Buy PFSI?

1. Performance over the past two years shows its incremental sales were extremely profitable, as its annual earnings per share growth of 57.4% outpaced its revenue gains
2. Annual tangible book value per share growth of 20.5% over the last five years was superb and indicates its capital strength increased during this cycle
3. Capital strength is on track to rise over the next 12 months as its 20.5% projected tangible book value per share growth implies profitability will accelerate from its two-year trend

At $94.66 per share, PennyMac Financial Services trades at 1.1x forward P/B. Is now a good time to buy? See for yourself in our full research report, it’s free.

High-Quality Stocks for All Market Conditions

Donald Trump’s victory in the 2024 U.S. Presidential Election sent major indices to all-time highs, but stocks have retraced as investors debate the health of the economy and the potential impact of tariffs.

While this leaves much uncertainty around 2025, a few companies are poised for long-term gains regardless of the political or macroeconomic climate, like 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 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-micro-cap company Kadant (+351% 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