Stability is great, but low-volatility stocks may struggle to deliver market-beating returns over time as they sometimes underperform during bull markets.
Choosing the wrong investments can cause you to fall behind, which is why we started StockStory - to separate the winners from the losers. Keeping that in mind, here are three low-volatility stocks to avoid and some better opportunities instead.
Energizer (ENR)
Rolling One-Year Beta: 0.89
Masterminds behind the viral Energizer Bunny mascot, Energizer (NYSE: ENR) is one of the world's largest manufacturers of batteries.
Why Should You Sell ENR?
- Absence of organic revenue growth over the past two years suggests it may have to lean into acquisitions to drive its expansion
- Capital intensity has ramped up over the last year as its free cash flow margin decreased by 9.3 percentage points
- High net-debt-to-EBITDA ratio of 5× increases the risk of forced asset sales or dilutive financing if operational performance weakens
Energizer is trading at $21.46 per share, or 6.2x forward P/E. Dive into our free research report to see why there are better opportunities than ENR.
AECOM (ACM)
Rolling One-Year Beta: 0.88
Founded in 1990 when a group of engineers from five companies decided to merge, AECOM (NYSE: ACM) provides various infrastructure consulting services.
Why Do We Think Twice About ACM?
- Demand cratered as it couldn’t win new orders over the past two years, leading to an average 2.7% decline in its backlog
- Projected sales decline of 5.4% for the next 12 months points to a tough demand environment ahead
- Operating margin of 4.7% falls short of the industry average, and the smaller profit dollars make it harder to react to unexpected market developments
AECOM’s stock price of $97.23 implies a valuation ratio of 18.4x forward P/E. To fully understand why you should be careful with ACM, check out our full research report (it’s free).
US Foods (USFD)
Rolling One-Year Beta: 0.56
With a fleet of over 6,500 trucks delivering everything from fresh produce to frozen entrées, US Foods (NYSE: USFD) is a major foodservice distributor that supplies food products and services to approximately 250,000 restaurants, healthcare facilities, hotels, and educational institutions across the United States.
Why Should You Dump USFD?
- Average unit sales growth of 3.2% over the past two years reflects steady demand for its products
- Responsiveness to unforeseen market trends is restricted due to its substandard operating margin profitability
- Lacking free cash flow generation means it has few chances to reinvest for growth, repurchase shares, or distribute capital
At $84.26 per share, US Foods trades at 18.7x forward P/E. Check out our free in-depth research report to learn more about why USFD doesn’t pass our bar.
Stocks We Like More
Your portfolio can’t afford to be based on yesterday’s story. The risk in a handful of heavily crowded stocks is rising daily.
The names generating the next wave of massive growth are right here in our Top 6 Stocks for this week. This is a curated list of our High Quality stocks that have generated a market-beating return of 244% over the last five years (as of June 30, 2025).
Stocks that made our list in 2020 include now familiar names such as Nvidia (+1,326% between June 2020 and June 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.
