Stability is great, but low-volatility stocks may struggle to deliver market-beating returns over time as they sometimes underperform during bull markets.
Finding the right balance between safety and returns isn’t easy, which is why StockStory is here to help. That said, here is one low-volatility stock that could offer consistent gains and two that may not keep up.
Two Stocks to Sell:
Tyson Foods (TSN)
Rolling One-Year Beta: -0.00
Started as a simple trucking business, Tyson Foods (NYSE:TSN) is one of the world’s largest producers of chicken, beef, and pork.
Why Is TSN Risky?
- Large revenue base makes it harder to increase sales quickly, and its annual revenue growth of 1.5% over the last three years was below our standards for the consumer staples sector
- Easily substituted products (and therefore stiff competition) result in an inferior gross margin of 7% that must be offset through higher volumes
- Earnings per share have contracted by 27.6% annually over the last three years, a headwind for returns as stock prices often echo long-term EPS performance
Tyson Foods is trading at $55 per share, or 14.6x forward P/E. Read our free research report to see why you should think twice about including TSN in your portfolio.
Quest (DGX)
Rolling One-Year Beta: 0.26
Processing approximately one-third of the adult U.S. population's lab tests annually, Quest Diagnostics (NYSE:DGX) provides laboratory testing and diagnostic information services to patients, physicians, hospitals, and other healthcare providers across the United States.
Why Are We Cautious About DGX?
- Underwhelming requisition volumes over the past two years show it’s struggled to increase its sales volumes and had to rely on price increases
- Costs have risen faster than its revenue over the last five years, causing its adjusted operating margin to decline by 10.3 percentage points
- Diminishing returns on capital suggest its earlier profit pools are drying up
At $180.21 per share, Quest trades at 18.3x forward P/E. Check out our free in-depth research report to learn more about why DGX doesn’t pass our bar.
One Stock to Buy:
Stride (LRN)
Rolling One-Year Beta: 0.35
Formerly known as K12, Stride (NYSE:LRN) is an education technology company providing education solutions through digital platforms.
Why Are We Backing LRN?
- Rapid growth in enrollments demonstrates strong market adoption
- Free cash flow margin grew by 6 percentage points over the last five years, giving the company more chips to play with
- Rising returns on capital show management is finding more attractive investment opportunities
Stride’s stock price of $143.90 implies a valuation ratio of 19.1x forward P/E. Is now the right time to buy? See for yourself in our full research report, it’s free.
Stocks We Like Even More
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 6 Stocks for this week. 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