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. That said, here are three low-volatility stocks to avoid and some better opportunities instead.
Richardson Electronics (RELL)
Rolling One-Year Beta: 0.73
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 Do We Think RELL Will Underperform?
- Backlog has dropped by 3.4% on average over the past two years, suggesting it’s losing orders as competition picks up
- Ability to fund investments or reward shareholders with increased buybacks or dividends is restricted by its weak free cash flow margin of -0.9% for the last five years
- Waning returns on capital from an already weak starting point displays the inefficacy of management’s past and current investment decisions
At $11.89 per share, Richardson Electronics trades at 38.3x forward P/E. Read our free research report to see why you should think twice about including RELL in your portfolio.
Fiserv (FISV)
Rolling One-Year Beta: 0.29
Powering over 1 billion accounts and processing more than 12,000 financial transactions per second globally, Fiserv (NASDAQ: FISV) provides payment processing and financial technology solutions that enable merchants, banks, and credit unions to accept payments and manage financial transactions.
Why Are We Hesitant About FISV?
- Annual sales growth of 6.1% over the last two years lagged behind its financials peers as its large revenue base made it difficult to generate incremental demand
- Below-average return on equity indicates management struggled to find compelling investment opportunities
Fiserv’s stock price of $65.13 implies a valuation ratio of 8.4x forward P/E. If you’re considering FISV for your portfolio, see our FREE research report to learn more.
Farmer Mac (AGM)
Rolling One-Year Beta: 0.62
Created by Congress in 1987 to build a bridge between Wall Street and rural America, Farmer Mac (NYSE: AGM) provides a secondary market for agricultural and rural loans, helping lenders increase their liquidity and lending capacity to serve rural America.
Why Are We Wary of AGM?
- Annual revenue growth of 5.8% over the last two years was below our standards for the financials sector
- Earnings per share lagged its peers over the last two years as they only grew by 7.5% annually
- Debt-to-equity ratio of 19.6× shows the firm has taken on excessive debt, leaving little room for error
Farmer Mac is trading at $167.22 per share, or 9.3x forward P/E. To fully understand why you should be careful with AGM, check out our full research report (it’s free).
Stocks We Like More
If your portfolio success hinges on just 4 stocks, your wealth is built on fragile ground. You have a small window to secure high-quality assets before the market widens and these prices disappear.
Don’t wait for the next volatility shock. 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 244% over the last five years (as of June 30, 2025).
Stocks that made our list in 2020 include now familiar names such as Nvidia (+1,326% between June 2020 and June 2025) as well as under-the-radar businesses like the once-micro-cap company Kadant (+351% five-year return). Find your next big winner with StockStory today.
