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 that don’t make the cut and some better opportunities instead.
BJ's (BJ)
Rolling One-Year Beta: 0.13
Appealing to the budget-conscious individual shopping for a household, BJ’s Wholesale Club (NYSE: BJ) is a membership-only retail chain that sells groceries, appliances, electronics, and household items, often in bulk quantities.
Why Is BJ Not Exciting?
- Poor same-store sales performance over the past two years indicates it’s having trouble bringing new shoppers into its brick-and-mortar locations
- Commoditized inventory, bad unit economics, and high competition are reflected in its low gross margin of 18.3%
- Poor expense management has led to an operating margin of 3.9% that is below the industry average
BJ's is trading at $107.80 per share, or 24.4x forward P/E. Read our free research report to see why you should think twice about including BJ in your portfolio.
Heartland Express (HTLD)
Rolling One-Year Beta: 0.79
Founded by the son of a trucker, Heartland Express (NASDAQ: HTLD) offers full-truckload deliveries across the United States and Mexico.
Why Do We Avoid HTLD?
- Annual sales declines of 6.8% for the past two years show its products and services struggled to connect with the market during this cycle
- Free cash flow margin shrank by 10.8 percentage points over the last five years, suggesting the company is consuming more capital to stay competitive
- Diminishing returns on capital from an already low starting point show that neither management’s prior nor current bets are going as planned
At $9.47 per share, Heartland Express trades at 4.8x forward EV-to-EBITDA. To fully understand why you should be careful with HTLD, check out our full research report (it’s free).
Horace Mann Educators (HMN)
Rolling One-Year Beta: 0.24
Founded in 1945 and named after the 19th-century education reformer known as the "father of American public education," Horace Mann Educators (NYSE: HMN) is an insurance company that specializes in providing auto, property, life, and retirement products tailored for educators and other public service employees.
Why Are We Cautious About HMN?
- 6.1% annual net premiums earned growth over the last four years was slower than its insurance peers
- Annual book value per share declines of 1.7% for the past five years show its capital management struggled during this cycle
- Underwhelming 6.3% return on equity reflects management’s difficulties in finding profitable growth opportunities
Horace Mann Educators’s stock price of $40.58 implies a valuation ratio of 1.2x forward P/B. Read our free research report to see why you should think twice about including HMN in your portfolio.
Stocks We Like More
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 Growth Stocks for this month. 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. Find your next big winner with StockStory today. Find your next big winner with StockStory today
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