Low-volatility stocks may offer stability, but that often comes at the cost of slower growth and the upside potential of more dynamic companies.
Luckily for you, StockStory helps you navigate which companies are truly worth holding. Keeping that in mind, here is one low-volatility stock providing safe-and-steady growth and two stuck in limbo.
Two Stocks to Sell:
STERIS (STE)
Rolling One-Year Beta: 0.42
With a mission critical role in preventing healthcare-associated infections, STERIS (NYSE: STE) provides infection prevention products, sterilization services, and medical equipment that help healthcare facilities and life science companies maintain sterile environments.
Why Are We Cautious About STE?
- Underwhelming 4.9% return on capital reflects management’s difficulties in finding profitable growth opportunities
STERIS’s stock price of $252.43 implies a valuation ratio of 24.6x forward P/E. Read our free research report to see why you should think twice about including STE in your portfolio.
Radian Group (RDN)
Rolling One-Year Beta: 0.76
Founded during the housing boom of 1977 and weathering multiple real estate cycles since, Radian Group (NYSE: RDN) provides mortgage insurance and real estate services, helping lenders manage risk and homebuyers achieve affordable homeownership.
Why Are We Wary of RDN?
- 3% annual declines in net premiums earned for the past five years indicates policy sales struggled this cycle
- Expenses have increased as a percentage of revenue over the last two years as its combined ratio degraded by 23.4 percentage points
- Incremental sales over the last two years were much less profitable as its earnings per share fell by 1.5% annually while its revenue grew
Radian Group is trading at $35.51 per share, or 1x forward P/B. To fully understand why you should be careful with RDN, check out our full research report (it’s free).
One Stock to Watch:
PennyMac Financial Services (PFSI)
Rolling One-Year Beta: 0.36
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 Are We Positive On PFSI?
- Impressive 39.9% annual net interest income growth over the last five years indicates it’s winning market share this cycle
- Additional sales over the last two years increased its profitability as the 66.2% annual growth in its earnings per share outpaced its revenue
- Annual tangible book value per share growth of 18.8% over the last five years was superb and indicates its capital strength increased during this cycle
At $124.41 per share, PennyMac Financial Services trades at 1.5x forward P/B. Is now a good time to buy? See for yourself in our in-depth research report, it’s free.
Stocks We Like Even More
Donald Trump’s April 2025 "Liberation Day" tariffs sent markets into a tailspin, but stocks have since rebounded strongly, proving that knee-jerk reactions often create the best buying opportunities.
The smart money is already positioning for the next leg up. Don’t miss out on the recovery - check 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-micro-cap company Tecnoglass (+1,754% 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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