Low-volatility stocks may offer stability, but that often comes at the cost of slower growth and the upside potential of more dynamic companies.
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 two low-volatility stocks providing safe-and-steady growth and one that may not deliver the returns you need.
One Stock to Sell:
Verizon (VZ)
Rolling One-Year Beta: 0.24
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 Do We Pass on VZ?
- Customer growth was choppy over the past two years, suggesting that increasing competition is causing challenges in landing new contracts
- Capital intensity will likely ramp up in the next year as its free cash flow margin is expected to contract by 2.2 percentage points
- Eroding returns on capital from an already low base indicate that management’s recent investments are destroying value
At $43.30 per share, Verizon trades at 9.2x forward P/E. If you’re considering VZ for your portfolio, see our FREE research report to learn more.
Two Stocks to Watch:
Watts Water Technologies (WTS)
Rolling One-Year Beta: 0.88
Founded in 1874, Watts Water (NYSE: WTS) specializes in manufacturing water products and systems for residential, commercial, and industrial applications globally.
Why Is WTS Interesting?
- Offerings are difficult to replicate at scale and lead to a stellar gross margin of 45%
- Operating profits and efficiency rose over the last five years as it benefited from some fixed cost leverage
- Share buybacks catapulted its annual earnings per share growth to 16.9%, which outperformed its revenue gains over the last five years
Watts Water Technologies is trading at $237.29 per share, or 25.6x forward P/E. Is now the time to initiate a position? Find out in our full research report, it’s free.
Barrett (BBSI)
Rolling One-Year Beta: 0.66
Operating as a professional employer organization (PEO) that serves over 8,000 companies with more than 120,000 worksite employees, Barrett Business Services (NASDAQ: BBSI) provides management solutions that help small and mid-sized businesses handle human resources, payroll, workers' compensation, and other administrative functions.
Why Are We Positive On BBSI?
- Operating margin improvement of 1.1 percentage points over the last five years demonstrates its ability to scale efficiently
- Stellar returns on capital showcase management’s ability to surface highly profitable business ventures, and its returns are growing as it capitalizes on even better market opportunities
- Improving returns on capital reflect management’s ability to monetize investments
Barrett’s stock price of $41.09 implies a valuation ratio of 18.1x forward P/E. Is now a good time to buy? See for yourself in our full research report, it’s free.
Stocks We Like Even More
Market indices reached historic highs following Donald Trump’s presidential victory in November 2024, but the outlook for 2025 is clouded by new trade policies that could impact business confidence and growth.
While this has caused many investors to adopt a "fearful" wait-and-see approach, we’re leaning into our best ideas that can grow regardless of the political or macroeconomic climate. Take advantage of Mr. Market by checking out 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 176% over the last five years.
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 Tecnoglass (+1,754% five-year return). Find your next big winner with StockStory today for free.
