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 are three low-volatility stocks to steer clear of and a few better alternatives.
Pangaea (PANL)
Rolling One-Year Beta: 0.92
Established in 1996, Pangaea Logistics (NASDAQ:PANL) specializes in global logistics and transportation services, focusing on the shipment of dry bulk cargoes.
Why Are We Hesitant About PANL?
- Gross margin of 19.8% is below its competitors, leaving less money to invest in areas like marketing and R&D
- Day-to-day expenses have swelled relative to revenue over the last five years as its operating margin fell by 4.9 percentage points
- Earnings per share have dipped by 23.4% annually over the past four years, which is concerning because stock prices follow EPS over the long term
At $8.43 per share, Pangaea trades at 9.4x forward P/E. Read our free research report to see why you should think twice about including PANL in your portfolio.
Rogers (ROG)
Rolling One-Year Beta: 0.75
With roots dating back to 1832, making it one of America's oldest continuously operating companies, Rogers (NYSE:ROG) designs and manufactures specialized engineered materials and components used in electric vehicles, telecommunications, renewable energy, and other high-performance applications.
Why Are We Out on ROG?
- Flat sales over the last five years suggest it must find different ways to grow during this cycle
- Falling earnings per share over the last five years has some investors worried as stock prices ultimately follow EPS over the long term
- Underwhelming 4.4% return on capital reflects management’s difficulties in finding profitable growth opportunities, and its shrinking returns suggest its past profit sources are losing steam
Rogers’s stock price of $129.77 implies a valuation ratio of 30.9x forward P/E. If you’re considering ROG for your portfolio, see our FREE research report to learn more.
Verizon (VZ)
Rolling One-Year Beta: -0.25
Formed in 1984 as Bell Atlantic after the breakup of Bell System into seven companies, Verizon (NYSE:VZ) is a telecom giant providing a range of communications and internet services.
Why Are We Bearish on VZ?
- Sales stagnated over the last five years and signal the need for new growth strategies
- Free cash flow margin is on track to jump by 1.3 percentage points next year, meaning the company will have more resources to pursue growth initiatives, repurchase shares, or pay dividends
- Shrinking returns on capital from an already weak position reveal that neither previous nor ongoing investments are yielding the desired results
Verizon is trading at $48.14 per share, or 9.5x forward P/E. Check out our free in-depth research report to learn more about why VZ doesn’t pass our bar.
Stocks We Like More
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Stocks that made our list in 2020 include now familiar names such as Nvidia (+1,460% between June 2020 and June 2025) as well as under-the-radar businesses like the once-micro-cap company Tecnoglass (+1,552% between June 2020 and June 2025). Find your next big winner with StockStory today.