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 succeed under all market conditions and two that may not keep up.
Two Stocks to Sell:
Reynolds (REYN)
Rolling One-Year Beta: 0.03
Best known for its aluminum foil, Reynolds (NASDAQ: REYN) is a household products company whose products focus on food storage, cooking, and waste.
Why Do We Avoid REYN?
- Declining unit sales over the past two years suggest it might have to lower prices to stimulate growth
- Forecasted revenue decline of 1.4% for the upcoming 12 months implies demand will fall off a cliff
- 6.1 percentage point decline in its free cash flow margin over the last year reflects the company’s increased investments to defend its market position
Reynolds is trading at $23.11 per share, or 14.1x forward P/E. Check out our free in-depth research report to learn more about why REYN doesn’t pass our bar.
Adtalem (ATGE)
Rolling One-Year Beta: 0.79
Formerly known as DeVry Education Group, Adtalem Global Education (NYSE: ATGE) is a global provider of workforce solutions and educational services.
Why Does ATGE Give Us Pause?
- Sales trends were unexciting over the last two years as its 9.7% annual growth was below the typical consumer discretionary company
- Projected 1.3 percentage point decline in its free cash flow margin next year reflects the company’s plans to increase its investments to defend its market position
- Underwhelming 9.7% return on capital reflects management’s difficulties in finding profitable growth opportunities
Adtalem’s stock price of $134.74 implies a valuation ratio of 19.4x forward P/E. Read our free research report to see why you should think twice about including ATGE in your portfolio.
One Stock to Watch:
Broadridge (BR)
Rolling One-Year Beta: 0.53
Processing over $10 trillion in equity and fixed income trades daily and managing proxy voting for over 800 million equity positions, Broadridge Financial Solutions (NYSE: BR) provides technology-driven solutions that power investing, governance, and communications for banks, broker-dealers, asset managers, and public companies.
Why Do We Like BR?
- Annual revenue growth of 9.1% over the past five years was outstanding, reflecting market share gains this cycle
- Additional sales over the last five years increased its profitability as the 13% annual growth in its earnings per share outpaced its revenue
- Free cash flow margin increased by 4.4 percentage points over the last five years, giving the company more capital to invest or return to shareholders
At $241.21 per share, Broadridge trades at 27.2x forward P/E. Is now the time to initiate a position? Find out in our full research report, it’s free.
Stocks We Like Even More
Market indices reached historic highs following Donald Trump’s presidential victory in November 2024, but the outlook for 2025 is clouded by new trade policies that could impact business confidence and growth.
While this has caused many investors to adopt a "fearful" wait-and-see approach, we’re leaning into our best ideas that can grow regardless of the political or macroeconomic climate. Take advantage of Mr. Market by checking out our Top 5 Strong Momentum Stocks for this week. This is a curated list of our High Quality stocks that have generated a market-beating return of 176% over the last five years.
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.
