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 to steer clear of and a few better alternatives.
The Marzetti Company (MZTI)
Rolling One-Year Beta: 0.09
Known for its frozen garlic bread and Parkerhouse rolls, The Marzetti Company (NASDAQ:MZTI) sells bread, dressing, and dips to the retail and food service channels.
Why Does MZTI Worry Us?
- Muted 4% annual revenue growth over the last three years shows its demand lagged behind its consumer staples peers
- Estimated sales growth of 1.8% for the next 12 months implies demand will slow from its three-year trend
- Gross margin of 23.4% is below its competitors, leaving less money to invest in areas like marketing and production facilities
At $162.21 per share, The Marzetti Company trades at 23.1x forward P/E. Dive into our free research report to see why there are better opportunities than MZTI.
Shoals (SHLS)
Rolling One-Year Beta: 0.57
Started in Huntsville, Alabama, Shoals (NASDAQ:SHLS) designs and manufactures products that make solar energy systems work more efficiently.
Why Do We Think Twice About SHLS?
- Sales tumbled by 2.1% annually over the last two years, showing market trends are working against its favor during this cycle
- Sales were less profitable over the last two years as its earnings per share fell by 27.6% annually, worse than its revenue declines
- Waning returns on capital from an already weak starting point displays the inefficacy of management’s past and current investment decisions
Shoals’s stock price of $8.95 implies a valuation ratio of 18.2x forward P/E. To fully understand why you should be careful with SHLS, check out our full research report (it’s free for active Edge members).
NVR (NVR)
Rolling One-Year Beta: 0.20
Known for its unique land acquisition strategy, NVR (NYSE:NVR) is a respected homebuilder and mortgage company in the United States.
Why Does NVR Fall Short?
- New orders were hard to come by as its backlog was flat over the past two years
- Incremental sales over the last two years were much less profitable as its earnings per share fell by 2.1% annually while its revenue grew
- Waning returns on capital imply its previous profit engines are losing steam
NVR is trading at $7,325 per share, or 17.8x forward P/E. Read our free research report to see why you should think twice about including NVR in your portfolio.
High-Quality Stocks for All Market Conditions
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 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 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.