A stock with low volatility can be reassuring, but it doesn’t always mean strong long-term performance. Investors who prioritize stability may miss out on higher-reward opportunities elsewhere.

Finding the right balance between safety and returns isn’t easy, which is why StockStory is here to help. That said, here are three low-volatility stocks to steer clear of and a few better alternatives.

LKQ (LKQ)

Rolling One-Year Beta: 0.39

A global distributor of vehicle parts and accessories, LKQ (NASDAQ: LKQ) offers its customers a comprehensive selection of high-quality, affordably priced automobile products.

Why Are We Out on LKQ?

1. Absence of organic revenue growth over the past two years suggests it may have to lean into acquisitions to drive its expansion
2. Estimated sales growth of 2% for the next 12 months implies demand will slow from its two-year trend
3. Diminishing returns on capital from an already low starting point show that neither management’s prior nor current bets are going as planned

LKQ’s stock price of $38.60 implies a valuation ratio of 10.5x forward P/E. Check out our free in-depth research report to learn more about why LKQ doesn’t pass our bar.

Mettler-Toledo (MTD)

Rolling One-Year Beta: 0.84

With roots dating back to the precision balance innovations of Swiss engineer Erhard Mettler, Mettler-Toledo (NYSE: MTD) manufactures precision weighing instruments, analytical equipment, and product inspection systems used in laboratories, industrial settings, and food retail.

Why Are We Wary of MTD?

1. Products and services are facing significant end-market challenges during this cycle as sales have declined by 1.5% annually over the last two years
2. Core business is underperforming as its organic revenue has disappointed over the past two years, suggesting it might need acquisitions to stimulate growth
3. Anticipated sales growth of 3.4% for the next year implies demand will be shaky

At $1,207 per share, Mettler-Toledo trades at 27.7x forward P/E. To fully understand why you should be careful with MTD, check out our full research report (it’s free).

Community Bank (CBU)

Rolling One-Year Beta: 0.89

Tracing its roots back to 1866 in upstate New York, Community Financial System (NYSE: CBU) is a financial holding company that provides banking, employee benefits, wealth management, and insurance services to retail, commercial, and municipal customers.

Why Does CBU Give Us Pause?

1. 5.6% annual net interest income growth over the last four years was slower than its bank peers
2. Inferior net interest margin of 3.1% means it must compensate for lower profitability through increased loan originations
3. Products and services are facing significant credit quality challenges during this cycle as tangible book value per share has declined by 4.3% annually over the last five years

Community Bank is trading at $59.46 per share, or 1.6x forward P/B. Dive into our free research report to see why there are better opportunities than CBU.

High-Quality Stocks for All Market Conditions

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 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-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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