3 Low-Volatility Stocks That Fall Short

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. That said, here are three low-volatility stocks to avoid and some better opportunities instead.

GATX (GATX)

Rolling One-Year Beta: 0.89

Originally founded to ship beer, GATX (NYSE:GATX) provides leasing and management services for railcars and other transportation assets globally.

Why Are We Wary of GATX?

1. Demand for its offerings was relatively low as its number of active railcars has underwhelmed
2. Cash-burning history makes us doubt the long-term viability of its business model
3. Unfavorable liquidity position could lead to additional equity financing that dilutes shareholders

GATX’s stock price of $160.18 implies a valuation ratio of 17.4x forward P/E. Read our free research report to see why you should think twice about including GATX in your portfolio.

Oaktree Specialty Lending (OCSL)

Rolling One-Year Beta: 0.51

Managed by Oaktree Capital Management, one of the world's premier alternative investment firms, Oaktree Specialty Lending (NASDAQ:OCSL) is a business development company that provides customized financing solutions to mid-market companies across various industries.

Why Should You Dump OCSL?

1. Products and services are facing significant end-market challenges during this cycle as sales have declined by 1.9% annually over the last two years
2. Earnings per share decreased by more than its revenue over the last two years, showing each sale was less profitable
3. Products and services are facing significant credit quality challenges during this cycle as tangible book value per share has declined by 1.7% annually over the last five years

Oaktree Specialty Lending is trading at $13.85 per share, or 8.3x forward P/E. If you’re considering OCSL for your portfolio, see our FREE research report to learn more.

Capital Southwest (CSWC)

Rolling One-Year Beta: 0.66

Originally founded in 1961 as a venture capital investor that helped launch Texas Instruments, Capital Southwest (NASDAQ:CSWC) is a business development company that provides debt and equity financing to middle-market companies primarily in the United States.

Why Do We Think Twice About CSWC?

1. Performance over the past two years shows its incremental sales were less profitable as its earnings per share were flat

At $22.43 per share, Capital Southwest trades at 9.6x forward P/E. To fully understand why you should be careful with CSWC, check out our full research report (it’s free).

Stocks We Like More

Trump’s April 2025 tariff bombshell triggered a massive market selloff, but stocks have since staged an impressive recovery, leaving those who panic sold on the sidelines.

Take advantage of the rebound 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 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

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