Stability is great, but low-volatility stocks may struggle to deliver market-beating returns over time as they sometimes underperform during bull markets.

Choosing the wrong investments can cause you to fall behind, which is why we started StockStory - to separate the winners from the losers. Keeping that in mind, here are three low-volatility stocks that don’t make the cut and some better opportunities instead.

Paycor (PYCR)

Rolling One-Year Beta: 0.63

Founded in 1990 in Cincinnati, Ohio, Paycor (NASDAQ: PYCR) provides software for small businesses to manage their payroll and HR needs in one place.

Why Does PYCR Give Us Pause?

1. Estimated sales growth of 9.6% for the next 12 months implies demand will slow from its three-year trend
2. Gross margin of 66% is below its competitors, leaving less money to invest in areas like marketing and R&D
3. Historical operating margin losses point to an inefficient cost structure

Paycor’s stock price of $22.49 implies a valuation ratio of 5.3x forward price-to-sales. To fully understand why you should be careful with PYCR, check out our full research report (it’s free).

Richardson Electronics (RELL)

Rolling One-Year Beta: 0.79

Founded in 1947, Richardson Electronics (NASDAQ: RELL) is a distributor of power grid and microwave tubes as well as consumables related to those products.

Why Are We Out on RELL?

1. Sales tumbled by 12.3% annually over the last two years, showing market trends are working against its favor during this cycle
2. Earnings per share have contracted by 74.7% annually over the last two years, a headwind for returns as stock prices often echo long-term EPS performance
3. Poor free cash flow margin of -0.4% for the last five years limits its freedom to invest in growth initiatives, execute share buybacks, or pay dividends

Richardson Electronics is trading at $9.71 per share, or 13.9x forward P/E. Check out our free in-depth research report to learn more about why RELL doesn’t pass our bar.

Markel Group (MKL)

Rolling One-Year Beta: 0.64

Often referred to as a "mini Berkshire Hathaway" for its three-engine business model of insurance, investments, and wholly-owned businesses, Markel Group (NYSE: MKL) is a specialty insurance company that underwrites complex risks, manages investment portfolios, and owns a diverse collection of operating businesses.

Why Are We Cautious About MKL?

1. Sizable revenue base leads to growth challenges as its 3.8% annual net premiums earned increases over the last two years fell short of other insurance companies
2. Demand will likely fall over the next 12 months as Wall Street expects flat revenue
3. Earnings per share lagged its peers over the last two years as they only grew by 14.7% annually

At $1,987 per share, Markel Group trades at 1.4x forward P/B. Read our free research report to see why you should think twice about including MKL in your portfolio.

Stocks We Like More

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 9 Market-Beating Stocks. 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