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 that don’t make the cut and some better opportunities instead.
Silgan Holdings (SLGN)
Rolling One-Year Beta: 0.51
Established in 1987, Silgan Holdings (NYSE: SLGN) is a supplier of rigid packaging for consumer goods products, specializing in metal containers, closures, and plastic packaging.
Why Are We Out on SLGN?
- Products and services are facing significant end-market challenges during this cycle as sales have declined by 3% annually over the last two years
- Organic sales performance over the past two years indicates the company may need to make strategic adjustments or rely on M&A to catalyze faster growth
- Earnings per share have contracted by 2.7% annually over the last two years, a headwind for returns as stock prices often echo long-term EPS performance
Silgan Holdings’s stock price of $56.01 implies a valuation ratio of 13.5x forward P/E. Check out our free in-depth research report to learn more about why SLGN doesn’t pass our bar.
Amphastar Pharmaceuticals (AMPH)
Rolling One-Year Beta: 0.50
Founded in 1996 and known for its expertise in complex drug formulations, Amphastar Pharmaceuticals (NASDAQ: AMPH) develops and manufactures technically challenging injectable and inhalation medications, including both generic and proprietary pharmaceutical products.
Why Are We Cautious About AMPH?
- Smaller revenue base of $730.7 million means it hasn’t achieved the economies of scale that some industry juggernauts enjoy
- Demand will likely fall over the next 12 months as Wall Street expects flat revenue
Amphastar Pharmaceuticals is trading at $22.59 per share, or 6.9x forward P/E. Read our free research report to see why you should think twice about including AMPH in your portfolio.
United Bankshares (UBSI)
Rolling One-Year Beta: 0.79
With roots dating back to 1982 and a strong presence in the Mid-Atlantic region, United Bankshares (NASDAQ: UBSI) is a bank holding company that provides commercial and retail banking services through its United Bank subsidiary across multiple states.
Why Is UBSI Not Exciting?
- Sales were flat over the last two years, indicating it’s failed to expand this cycle
- Net interest income trends were unexciting over the last four years as its 6.4% annual growth was below the typical bank company
- Muted 7.3% annual tangible book value per share growth over the last two years shows its capital generation lagged behind its bank peers
At $36.86 per share, United Bankshares trades at 1x forward P/B. If you’re considering UBSI for your portfolio, see our FREE research report to learn more.
High-Quality Stocks for All Market Conditions
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