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. That said, here is one low-volatility stock providing safe-and-steady growth and two that may not keep up.
Two Stocks to Sell:
Choice Hotels (CHH)
Rolling One-Year Beta: 0.65
With almost 100% of its properties under franchise agreements, Choice Hotels (NYSE: CHH) is a hotel franchisor known for its diverse brand portfolio including Comfort Inn, Quality Inn, and Clarion.
Why Are We Out on CHH?
- Revenue per room has disappointed over the past two years due to weaker trends in its daily rates and occupancy levels
- Estimated sales decline of 1.5% for the next 12 months implies a challenging demand environment
- Eroding returns on capital suggest its historical profit centers are aging
Choice Hotels’s stock price of $104.98 implies a valuation ratio of 14.6x forward P/E. Read our free research report to see why you should think twice about including CHH in your portfolio.
PACCAR (PCAR)
Rolling One-Year Beta: 0.91
Founded more than a century ago, PACCAR (NASDAQ: PCAR) designs and manufactures commercial trucks of various weights and sizes for the commercial trucking industry.
Why Are We Hesitant About PCAR?
- Organic revenue growth fell short of our benchmarks over the past two years and implies it may need to improve its products, pricing, or go-to-market strategy
- Projected sales decline of 4.8% over the next 12 months indicates demand will continue deteriorating
- Falling earnings per share over the last two years has some investors worried as stock prices ultimately follow EPS over the long term
PACCAR is trading at $98.25 per share, or 18.2x forward P/E. To fully understand why you should be careful with PCAR, check out our full research report (it’s free for active Edge members).
One Stock to Watch:
RBC Bearings (RBC)
Rolling One-Year Beta: 0.91
With a Guinness World Record for engineering the largest spherical plain bearing, RBC Bearings (NYSE: RBC) is a manufacturer of bearings and related components for the aerospace & defense, industrial, and transportation industries.
Why Do We Like RBC?
- Annual revenue growth of 18.9% over the past five years was outstanding, reflecting market share gains this cycle
- Projected revenue growth of 14.5% for the next 12 months is above its two-year trend, pointing to accelerating demand
- Excellent operating margin of 20.2% highlights the efficiency of its business model, and its rise over the last five years was fueled by some leverage on its fixed costs
At $373.99 per share, RBC Bearings trades at 31.5x forward P/E. Is now the time to initiate a position? Find out in our full research report, it’s free for active Edge members.
High-Quality Stocks for All Market Conditions
Trump’s April 2025 tariff bombshell triggered a massive market selloff, but stocks have since staged an impressive recovery, leaving those who panic sold on the sidelines.
Take advantage of the rebound 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
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