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. Keeping that in mind, here is one low-volatility stock providing safe-and-steady growth and two that may not deliver the returns you need.
Two Stocks to Sell:
Royalty Pharma (RPRX)
Rolling One-Year Beta: 0.15
Pioneering a unique business model in the pharmaceutical industry since 1996, Royalty Pharma (NASDAQ:RPRX) acquires rights to receive portions of sales from successful biopharmaceutical products, providing funding to drug developers without conducting research itself.
Why Are We Hesitant About RPRX?
- Products and services are facing significant end-market challenges during this cycle as sales have declined by 1.2% annually over the last two years
- Subscale operations are evident in its revenue base of $2.31 billion, meaning it has fewer distribution channels than its larger rivals
Royalty Pharma’s stock price of $36.30 implies a valuation ratio of 7.1x forward P/E. To fully understand why you should be careful with RPRX, check out our full research report (it’s free).
Ares Capital (ARCC)
Rolling One-Year Beta: 0.69
As one of the largest business development companies in the United States with over $20 billion in assets, Ares Capital (NASDAQ:ARCC) is a business development company that provides financing solutions to middle-market companies, primarily through direct loans and equity investments.
Why Should You Sell ARCC?
- Performance over the past two years shows its incremental sales were much less profitable, as its earnings per share fell by 3.6% annually
At $21.17 per share, Ares Capital trades at 10.5x forward P/E. Check out our free in-depth research report to learn more about why ARCC doesn’t pass our bar.
One Stock to Watch:
Euronet Worldwide (EEFT)
Rolling One-Year Beta: 0.93
Operating a global network of over 47,000 ATMs and 821,000 point-of-sale terminals across more than 60 countries, Euronet Worldwide (NASDAQ:EEFT) provides electronic payment solutions including ATM services, prepaid product processing, and international money transfer services.
Why Could EEFT Be a Winner?
- Annual revenue growth of 9.8% over the last five years was above the sector average and underscores its products and services value to customers
- Share repurchases have increased shareholder returns as its annual earnings per share growth of 11.9% exceeded its revenue gains over the last two years
- Market-beating return on equity illustrates that management has a knack for investing in profitable ventures
Euronet Worldwide is trading at $89.30 per share, or 8.5x forward P/E. Is now the time to initiate a position? See for yourself in our in-depth research report, it’s free.
Stocks We Like Even 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 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
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