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 avoid and some better opportunities instead.

ICF International (ICFI)

Rolling One-Year Beta: 0.45

Operating at the intersection of policy, technology, and implementation for over five decades, ICF International (NASDAQ: ICFI) provides professional consulting services and technology solutions to government agencies and commercial clients across energy, health, environment, and security sectors.

Why Do We Pass on ICFI?

1. Sales pipeline suggests its future revenue growth won’t meet our standards as its backlog averaged 1.2% declines over the past two years
2. Sales are projected to tank by 2.3% over the next 12 months as demand evaporates
3. Below-average returns on capital indicate management struggled to find compelling investment opportunities

At $97.77 per share, ICF International trades at 14.4x forward P/E. If you’re considering ICFI for your portfolio, see our FREE research report to learn more.

United Parcel Service (UPS)

Rolling One-Year Beta: 0.83

Trademarking its recognizable UPS Brown color, UPS (NYSE: UPS) offers package delivery, supply chain management, and freight forwarding services.

Why Do We Steer Clear of UPS?

1. Declining unit sales over the past two years show it’s struggled to increase its sales volumes and had to rely on price increases
2. Performance over the past two years shows each sale was less profitable as its earnings per share dropped by 18.4% annually, worse than its revenue
3. Eroding returns on capital suggest its historical profit centers are aging

United Parcel Service’s stock price of $87.07 implies a valuation ratio of 11.8x forward P/E. To fully understand why you should be careful with UPS, check out our full research report (it’s free).

Brookline Bancorp (BRKL)

Rolling One-Year Beta: 0.91

Founded in 1871 and operating through three subsidiary banks across three states, Brookline Bancorp (NASDAQ: BRKL) is a multi-bank holding company that provides commercial, business, and retail banking services to small and mid-sized businesses and individuals in New England and New York.

Why Are We Wary of BRKL?

1. 6.7% annual net interest income growth over the last five years was slower than its banking peers
2. 27 basis point (100 basis points = 1 percentage point) decline in its net interest margin over the last two years reflects the firm’s willingness to accept lower profitability to defend its market position
3. Performance over the past two years shows each sale was less profitable, as its earnings per share fell by 16.1% annually

Brookline Bancorp is trading at $10.60 per share, or 0.5x forward P/B. Read our free research report to see why you should think twice about including BRKL in your portfolio.

High-Quality Stocks for All Market Conditions

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