Low-volatility stocks may offer stability, but that often comes at the cost of slower growth and the upside potential of more dynamic companies.
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.
Burlington (BURL)
Rolling One-Year Beta: 0.91
Founded in 1972 as a discount coat and outerwear retailer, Burlington Stores (NYSE:BURL) is now an off-price retailer that has broadened into general apparel, footwear, and home goods.
Why Do We Think Twice About BURL?
- Annual sales growth of 8% over the last six years lagged behind its consumer retail peers as its large revenue base made it difficult to generate incremental demand
- Free cash flow margin shrank by 7.5 percentage points over the last year, suggesting the company is consuming more capital to stay competitive
- Underwhelming 8.5% return on capital reflects management’s difficulties in finding profitable growth opportunities
Burlington’s stock price of $254.51 implies a valuation ratio of 26.6x forward P/E. Dive into our free research report to see why there are better opportunities than BURL.
Kimberly-Clark (KMB)
Rolling One-Year Beta: 0.19
Originally founded as a Wisconsin paper mill in 1872, Kimberly-Clark (NYSE:KMB) is now a household products powerhouse known for personal care and tissue products.
Why Does KMB Fall Short?
- Flat sales over the last three years suggest it must innovate and find new ways to grow
- Flat unit sales over the past two years show it’s struggled to move its products and had to rely on price increases
- Sales are projected to tank by 3.1% over the next 12 months as demand evaporates further
Kimberly-Clark is trading at $127.07 per share, or 16.8x forward P/E. To fully understand why you should be careful with KMB, check out our full research report (it’s free).
Ready Capital (RC)
Rolling One-Year Beta: 0.91
Operating as one of only 17 non-bank Small Business Lending Companies with preferred lender status from the SBA, Ready Capital (NYSE:RC) is a multi-strategy real estate finance company that originates, acquires, and services commercial real estate loans, small business loans, and other real estate investments.
Why Should You Sell RC?
- Forecasted net interest income decline of 10.2% for the upcoming 12 months implies demand will fall off a cliff
- Earnings per share have dipped by 19.9% annually over the past five years, which is concerning because stock prices follow EPS over the long term
- Loan losses and capital returns have eroded its tangible book value per share this cycle as its tangible book value per share declined by 6.5% annually over the last five years
At $4.33 per share, Ready Capital trades at 0.4x forward P/B. If you’re considering RC for your portfolio, see our FREE research report to learn more.
High-Quality Stocks for All Market Conditions
Donald Trump’s victory in the 2024 U.S. Presidential Election sent major indices to all-time highs, but stocks have retraced as investors debate the health of the economy and the potential impact of tariffs.
While this leaves much uncertainty around 2025, a few companies are poised for long-term gains regardless of the political or macroeconomic climate, like our Top 9 Market-Beating Stocks. 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).
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