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 steer clear of and a few better alternatives.

Home Depot (HD)

Rolling One-Year Beta: 0.70

Founded and headquartered in Atlanta, Georgia, Home Depot (NYSE: HD) is a home improvement retailer that sells everything from tools to building materials to appliances.

Why Are We Hesitant About HD?

1. Disappointing same-store sales over the past two years show customers aren’t responding well to its product selection and store experience
2. Widely-available products (and therefore stiff competition) result in an inferior gross margin of 33.4% that must be offset through higher volumes
3. Incremental sales over the last three years were much less profitable as its earnings per share fell by 3.3% annually while its revenue grew

Home Depot’s stock price of $345.50 implies a valuation ratio of 23.3x forward P/E. Read our free research report to see why you should think twice about including HD in your portfolio.

H&R Block (HRB)

Rolling One-Year Beta: 0.03

Founded in 1955 by brothers Henry W. Bloch and Richard A. Bloch, H&R Block (NYSE: HRB) is a tax preparation company offering professional tax assistance and financial solutions to individuals and small businesses.

Why Are We Out on HRB?

1. 5.3% annual revenue growth over the last five years was slower than its consumer discretionary peers
2. Ability to fund investments or reward shareholders with increased buybacks or dividends is restricted by its weak free cash flow margin of 16.7% for the last two years
3. Unchanged returns on capital make it difficult for the company’s valuation multiple to re-rate

H&R Block is trading at $43.57 per share, or 8.9x forward P/E. Check out our free in-depth research report to learn more about why HRB doesn’t pass our bar.

KB Home (KBH)

Rolling One-Year Beta: 0.46

The first homebuilder to be listed on the NYSE, KB Home (NYSE: KB) is a homebuilding company targeting the first-time home buyer and move-up buyer markets.

Why Do We Steer Clear of KBH?

1. Demand cratered as it couldn’t win new orders over the past two years, leading to an average 21.6% decline in its backlog
2. Earnings per share have dipped by 4.1% annually over the past two years, which is concerning because stock prices follow EPS over the long term
3. Diminishing returns on capital suggest its earlier profit pools are drying up

At $56.82 per share, KB Home trades at 13.3x forward P/E. If you’re considering KBH for your portfolio, see our FREE research report to learn more.

Stocks We Like More

If your portfolio success hinges on just 4 stocks, your wealth is built on fragile ground. You have a small window to secure high-quality assets before the market widens and these prices disappear.

Don’t wait for the next volatility shock. Check out our Top 5 Strong Momentum 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 Tecnoglass (+1,754% 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.