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.

Luckily for you, StockStory helps you navigate which companies are truly worth holding. Keeping that in mind, here are three low-volatility stocks to avoid and some better opportunities instead.

Akamai (AKAM)

Rolling One-Year Beta: 0.69

Founded in 1999 by two engineers from MIT, Akamai (NASDAQ: AKAM) provides software for organizations to efficiently deliver web content to their customers.

Why Are We Out on AKAM?

1. Sales trends were unexciting over the last three years as its 4.5% annual growth was well below the typical software company
2. Bad unit economics and steep infrastructure costs are reflected in its gross margin of 59.1%, one of the worst among software companies
3. Long payback periods on sales and marketing expenses limit customer growth and signal the company operates in a highly competitive environment

Akamai is trading at $76.17 per share, or 2.8x forward price-to-sales. Read our free research report to see why you should think twice about including AKAM in your portfolio.

Frontdoor (FTDR)

Rolling One-Year Beta: 0.87

Established in 2018 as a spin-off from ServiceMaster Global Holdings, Frontdoor (NASDAQ: FTDR) is a provider of home warranty and service plans.

Why Are We Wary of FTDR?

1. Number of home service plans has disappointed over the past two years, indicating weak demand for its offerings
2. Capital intensity will likely ramp up in the next year as its free cash flow margin is expected to contract by 2.4 percentage points
3. Waning returns on capital imply its previous profit engines are losing steam

At $55.95 per share, Frontdoor trades at 18.5x forward P/E. To fully understand why you should be careful with FTDR, check out our full research report (it’s free).

U.S. Cellular (USM)

Rolling One-Year Beta: 0.58

Operating as a majority-owned subsidiary of Telephone and Data Systems since its founding in 1983, US Cellular (NYSE: USM) is a regional wireless telecommunications provider serving 4.6 million customers across 21 states with mobile phone, internet, and IoT services.

Why Should You Sell USM?

1. Products and services are facing significant end-market challenges during this cycle as sales have declined by 1.6% annually over the last five years
2. Adjusted operating margin profits fell over the last five years as its sales dropped and it struggled to adjust its fixed costs
3. Falling earnings per share over the last five years has some investors worried as stock prices ultimately follow EPS over the long term

U.S. Cellular’s stock price of $62.78 implies a valuation ratio of 5.6x forward EV-to-EBITDA. Check out our free in-depth research report to learn more about why USM doesn’t pass our bar.

High-Quality Stocks for All Market Conditions

Market indices reached historic highs following Donald Trump’s presidential victory in November 2024, but the outlook for 2025 is clouded by new trade policies that could impact business confidence and growth.

While this has caused many investors to adopt a "fearful" wait-and-see approach, we’re leaning into our best ideas that can grow regardless of the political or macroeconomic climate. Take advantage of Mr. Market by checking out 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 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-small-cap company Comfort Systems (+782% five-year return). Find your next big winner with StockStory today for free.