Stability is great, but low-volatility stocks may struggle to deliver market-beating returns over time as they sometimes underperform during bull markets.
Luckily for you, StockStory helps you navigate which companies are truly worth holding. Keeping that in mind, here are three low-volatility stocks to steer clear of and a few better alternatives.
Target (TGT)
Rolling One-Year Beta: 0.83
With a higher focus on style and aesthetics compared to other large general merchandise retailers, Target (NYSE: TGT) serves the suburban consumer who is looking for a wide range of products under one roof.
Why Should You Dump TGT?
- Disappointing same-store sales over the past two years show customers aren’t responding well to its product selection and store experience
- Widely-available products (and therefore stiff competition) result in an inferior gross margin of 28% that must be offset through higher volumes
- Operating margin of 5.2% falls short of the industry average, and the smaller profit dollars make it harder to react to unexpected market developments
At $115.40 per share, Target trades at 14.5x forward P/E. To fully understand why you should be careful with TGT, check out our full research report (it’s free).
Norfolk Southern (NSC)
Rolling One-Year Beta: 0.81
Starting with a single route from Virginia to North Carolina, Norfolk Southern (NYSE: NSC) is a freight transportation company operating a major railroad network across the eastern United States.
Why Do We Steer Clear of NSC?
- Weak unit sales over the past two years imply it may need to invest in improvements to get back on track
- Expenses have increased as a percentage of revenue over the last five years as its operating margin fell by 4.1 percentage points
- 8.4 percentage point decline in its free cash flow margin over the last five years reflects the company’s increased investments to defend its market position
Norfolk Southern’s stock price of $303.80 implies a valuation ratio of 25.4x forward P/E. Read our free research report to see why you should think twice about including NSC in your portfolio.
Kforce (KFRC)
Rolling One-Year Beta: 0.39
With nearly 60 years of matching skilled professionals with the right opportunities, Kforce (NYSE: KFRC) is a professional staffing company that specializes in placing technology and finance experts with businesses on both temporary and permanent bases.
Why Do We Avoid KFRC?
- Sales tumbled by 1% annually over the last five years, showing market trends are working against its favor during this cycle
- Performance over the past five years shows each sale was less profitable as its earnings per share dropped by 5.7% annually, worse than its revenue
- Eroding returns on capital suggest its historical profit centers are aging
Kforce is trading at $36.08 per share, or 16.5x forward P/E. Dive into our free research report to see why there are better opportunities than KFRC.
High-Quality Stocks for All Market Conditions
The market’s up big this year - but there’s a catch. Just 4 stocks account for half the S&P 500’s entire gain. That kind of concentration makes investors nervous, and for good reason. While everyone piles into the same crowded names, smart investors are hunting quality where no one’s looking - and paying a fraction of the price. Check out the high-quality names we’ve flagged in 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 Tecnoglass (+1,754% five-year return). Find your next big winner with StockStory today.
