A stock with low volatility can be reassuring, but it doesn’t always mean strong long-term performance. Investors who prioritize stability may miss out on higher-reward opportunities elsewhere.
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 that don’t make the cut and some better opportunities instead.
McCormick (MKC)
Rolling One-Year Beta: -0.03
The classic red Heinz ketchup bottle’s competitor, McCormick (NYSE:MKC) sells food-flavoring products like condiments, spices, and seasoning mixes.
Why Are We Hesitant About MKC?
- Organic sales performance over the past two years indicates the company may need to make strategic adjustments or rely on M&A to catalyze faster growth
- Demand will likely be soft over the next 12 months as Wall Street’s estimates imply tepid growth of 2.1%
- Capital intensity has ramped up over the last year as its free cash flow margin decreased by 5.4 percentage points
At $73.87 per share, McCormick trades at 23.7x forward P/E. Read our free research report to see why you should think twice about including MKC in your portfolio.
Solventum (SOLV)
Rolling One-Year Beta: 0.46
Founded in 1985, Solventum (NYSE:SOLV) develops, manufactures, and commercializes a portfolio of healthcare products and services addressing critical customer and therapeutic patient needs.
Why Are We Wary of SOLV?
- Absence of organic revenue growth over the past two years suggests it may have to lean into acquisitions to drive its expansion
- Costs have risen faster than its revenue over the last two years, causing its adjusted operating margin to decline by 4.2 percentage points
- Performance over the past two years shows its incremental sales were much less profitable, as its earnings per share fell by 21.9% annually
Solventum is trading at $74.45 per share, or 13.2x forward P/E. If you’re considering SOLV for your portfolio, see our FREE research report to learn more.
Brookline Bancorp (BRKL)
Rolling One-Year Beta: 0.75
Founded in 1871 and operating through three subsidiary banks across three states, Brookline Bancorp (NASDAQ:BRKL) is a multi-bank holding company that provides commercial, business, and retail banking services to small and mid-sized businesses and individuals in New England and New York.
Why Does BRKL Give Us Pause?
- Muted 5.7% annual net interest income growth over the last four years shows its demand lagged behind its bank peers
- Concessions to defend its market share have ramped up over the last two years as its net interest margin decreased by 47.7 basis points (100 basis points = 1 percentage point)
- Earnings per share fell by 20.9% annually over the last two years while its revenue grew, showing its incremental sales were much less profitable
Brookline Bancorp’s stock price of $10.69 implies a valuation ratio of 0.5x forward P/B. Dive into our free research report to see why there are better opportunities than BRKL.
Stocks We Like 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 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 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