Low-volatility stocks may offer stability, but that often comes at the cost of slower growth and the upside potential of more dynamic companies.
Choosing the wrong investments can cause you to fall behind, which is why we started StockStory - to separate the winners from the losers. That said, here are three low-volatility stocks to steer clear of and a few better alternatives.
Trex (TREX)
Rolling One-Year Beta: 0.93
Addressing the demand for aesthetically-pleasing and unique outdoor living spaces, Trex Company (NYSE: TREX) makes wood-alternative decking, railing, and patio furniture.
Why Are We Cautious About TREX?
- Expenses have increased as a percentage of revenue over the last five years as its operating margin fell by 3.3 percentage points
- Free cash flow margin shrank by 5.4 percentage points over the last five years, suggesting the company is consuming more capital to stay competitive
- Waning returns on capital imply its previous profit engines are losing steam
At $52.44 per share, Trex trades at 21.8x forward P/E. To fully understand why you should be careful with TREX, check out our full research report (it’s free for active Edge members).
Global Industrial (GIC)
Rolling One-Year Beta: 0.90
Formerly known as Systemax, Global Industrial (NYSE: GIC) distributes industrial and commercial products to businesses and institutions.
Why Does GIC Fall Short?
- Muted 6.9% annual revenue growth over the last two years shows its demand lagged behind its industrials peers
- Incremental sales over the last two years were much less profitable as its earnings per share fell by 2.3% annually while its revenue grew
- Shrinking returns on capital suggest that increasing competition is eating into the company’s profitability
Global Industrial’s stock price of $34.31 implies a valuation ratio of 17.6x forward P/E. Dive into our free research report to see why there are better opportunities than GIC.
Everest Group (EG)
Rolling One-Year Beta: 0.48
Rebranded from Everest Re in 2023 to reflect its evolution beyond just reinsurance, Everest Group (NYSE: EG) underwrites property and casualty reinsurance and insurance worldwide, serving insurance companies, corporations, and other clients across six continents.
Why Are We Wary of EG?
- Estimated sales growth of 1.7% for the next 12 months implies demand will slow from its two-year trend
- Earnings per share fell by 10.2% annually over the last five years while its revenue grew, showing its incremental sales were much less profitable
Everest Group is trading at $348.55 per share, or 0.9x forward P/B. If you’re considering EG for your portfolio, see our FREE research report to learn more.
High-Quality Stocks for All Market Conditions
Trump’s April 2025 tariff bombshell triggered a massive market selloff, but stocks have since staged an impressive recovery, leaving those who panic sold on the sidelines.
Take advantage of the rebound by checking out our Top 5 Growth Stocks for this month. 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
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