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 are three low-volatility stocks to steer clear of and a few better alternatives.
Electronic Arts (EA)
Rolling One-Year Beta: 0.32
Best known for its Madden NFL and FIFA sports franchises, Electronic Arts (NASDAQ: EA) is one of the world’s largest video game publishers.
Why Do We Think Twice About EA?
- Annual revenue growth of 2.1% over the last three years was below our standards for the consumer internet sector
- Sales are projected to remain flat over the next 12 months as demand decelerates from its three-year trend
- Efficiency has decreased over the last few years as its EBITDA margin fell by 8.1 percentage points
Electronic Arts’s stock price of $159.35 implies a valuation ratio of 15.9x forward EV/EBITDA. To fully understand why you should be careful with EA, check out our full research report (it’s free).
Verisk (VRSK)
Rolling One-Year Beta: 0.31
Processing over 2.8 billion insurance transaction records annually through one of the world's largest private databases, Verisk Analytics (NASDAQ: VRSK) provides data, analytics, and technology solutions that help insurance companies assess risk, detect fraud, and make better business decisions.
Why Does VRSK Worry Us?
- 1.9% annual revenue growth over the last five years was slower than its business services peers
- Earnings growth over the last two years fell short of the peer group average as its EPS only increased by 8.7% annually
At $310.61 per share, Verisk trades at 43.1x forward P/E. Dive into our free research report to see why there are better opportunities than VRSK.
AGNC Investment (AGNC)
Rolling One-Year Beta: 0.51
Born during the 2008 financial crisis when mortgage markets were in turmoil, AGNC Investment (NASDAQ: AGNC) is a real estate investment trust that primarily invests in mortgage-backed securities guaranteed by U.S. government agencies or enterprises.
Why Are We Out on AGNC?
- Performance over the past five years shows its incremental sales were much less profitable, as its earnings per share fell by 6.4% annually
- Annual tangible book value per share declines of 9.5% for the past five years show its capital management struggled during this cycle
- Below-average return on equity indicates management struggled to find compelling investment opportunities
AGNC Investment is trading at $9.19 per share, or 1x forward P/B. Check out our free in-depth research report to learn more about why AGNC doesn’t pass our bar.
Stocks We Like 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 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 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 Kadant (+351% 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
