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 that don’t make the cut and some better opportunities instead.
Mondelez (MDLZ)
Rolling One-Year Beta: -0.03
Founded as Nabisco in 1903, Mondelez (NASDAQ: MDLZ) is a packaged snacks powerhouse best known for its Oreo, Cadbury, Toblerone, Ritz, and Trident brands.
Why Is MDLZ Not Exciting?
- Costs have risen faster than its revenue over the last year, causing its operating margin to decline by 6.8 percentage points
- Performance over the past three years shows its incremental sales were less profitable, as its 3.5% annual earnings per share growth trailed its revenue gains
- Below-average returns on capital indicate management struggled to find compelling investment opportunities
Mondelez is trading at $68 per share, or 22.7x forward P/E. Dive into our free research report to see why there are better opportunities than MDLZ.
Edgewell Personal Care (EPC)
Rolling One-Year Beta: 0.55
Boasting brands such as Banana Boat, Schick, and Skintimate, Edgewell Personal Care (NYSE: EPC) sells personal care products in the skin and sun care, shave, and feminine care categories.
Why Should You Dump EPC?
- Absence of organic revenue growth over the past two years suggests it may have to lean into acquisitions to drive its expansion
- Free cash flow margin shrank by 8.3 percentage points over the last year, suggesting the company is consuming more capital to stay competitive
- ROIC of 6.2% reflects management’s challenges in identifying attractive investment opportunities
Edgewell Personal Care’s stock price of $23.78 implies a valuation ratio of 7.2x forward P/E. Check out our free in-depth research report to learn more about why EPC doesn’t pass our bar.
Teledyne (TDY)
Rolling One-Year Beta: 0.89
Playing a role in mapping the ocean floor as we know it today, Teledyne (NYSE: TDY) offers digital imaging and instrumentation products for various industries.
Why Does TDY Worry Us?
- Core business is underperforming as its organic revenue has disappointed over the past two years, suggesting it might need acquisitions to stimulate growth
- Earnings growth underperformed the sector average over the last two years as its EPS grew by just 4.5% annually
- Low returns on capital reflect management’s struggle to allocate funds effectively, and its decreasing returns suggest its historical profit centers are aging
At $494.63 per share, Teledyne trades at 22.3x forward P/E. If you’re considering TDY for your portfolio, see our FREE research report to learn more.
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 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-small-cap company Comfort Systems (+782% 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
