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.
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 are three low-volatility stocks to avoid and some better opportunities instead.
Herbalife (HLF)
Rolling One-Year Beta: 0.40
With the first products sold out of the trunk of the founder’s car, Herbalife (NYSE: HLF) today offers a portfolio of shakes, supplements, personal care products, and weight management programs to help customers reach their nutritional and fitness goals.
Why Are We Cautious About HLF?
- Declining unit sales over the past two years show it’s struggled to move its products and had to rely on price increases
- Demand will likely be soft over the next 12 months as Wall Street’s estimates imply tepid growth of 3.6%
- Earnings per share decreased by more than its revenue over the last three years, partly because it diluted shareholders
Herbalife is trading at $8.98 per share, or 4.2x forward P/E. To fully understand why you should be careful with HLF, check out our full research report (it’s free).
Keurig Dr Pepper (KDP)
Rolling One-Year Beta: 0.19
Born out of a 2018 merger between Keurig Green Mountain and Dr Pepper Snapple, Keurig Dr Pepper (NASDAQ: KDP) is a consumer staples powerhouse boasting a portfolio of beverages including sodas, coffees, and juices.
Why Is KDP Not Exciting?
- Sizable revenue base leads to growth challenges as its 5.9% annual revenue increases over the last three years fell short of other consumer staples companies
- Expenses have increased as a percentage of revenue over the last year as its operating margin fell by 6.1 percentage points
- Underwhelming 5.8% return on capital reflects management’s difficulties in finding profitable growth opportunities
Keurig Dr Pepper’s stock price of $26.28 implies a valuation ratio of 12.5x forward P/E. If you’re considering KDP for your portfolio, see our FREE research report to learn more.
Assured Guaranty (AGO)
Rolling One-Year Beta: 0.66
Serving as a financial safety net for over $11 trillion in debt service payments since its founding in 2003, Assured Guaranty (NYSE: AGO) provides credit protection products that guarantee scheduled payments on municipal bonds, infrastructure projects, and structured finance obligations.
Why Are We Wary of AGO?
- Insurance policy sales contracted this cycle as net premiums earned decreased by 4.3% annually over the last five years
- Sales are projected to tank by 29.8% over the next 12 months as its demand continues evaporating
- Low return on equity reflects management’s struggle to allocate funds effectively
At $84.88 per share, Assured Guaranty trades at 0.7x forward P/B. Dive into our free research report to see why there are better opportunities than AGO.
Stocks We Like 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 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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