3 Low-Volatility Stocks We Approach with Caution

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 that don’t make the cut and some better opportunities instead.

Mohawk Industries (MHK)

Rolling One-Year Beta: 0.91

Established in 1878, Mohawk Industries (NYSE:MHK) is a leading producer of floor-covering products for both residential and commercial applications.

Why Are We Out on MHK?

1. 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
2. Free cash flow margin is not anticipated to grow over the next year
3. Waning returns on capital from an already weak starting point displays the inefficacy of management’s past and current investment decisions

Mohawk Industries’s stock price of $114.37 implies a valuation ratio of 11x forward P/E. If you’re considering MHK for your portfolio, see our FREE research report to learn more.

Scorpio Tankers (STNG)

Rolling One-Year Beta: 0.76

Operating one of the youngest fleets in the industry, Scorpio Tankers (NYSE: STNG) is an international provider of marine transportation services, specializing in the shipment of refined petroleum.

Why Are We Cautious About STNG?

1. Products and services are facing significant end-market challenges during this cycle as sales have declined by 2.9% annually over the last five years
2. Number of total vessels has disappointed over the past two years, indicating weak demand for its offerings
3. Earnings per share have contracted by 37.6% annually over the last two years, a headwind for returns as stock prices often echo long-term EPS performance

At $59.20 per share, Scorpio Tankers trades at 9.9x forward P/E. Dive into our free research report to see why there are better opportunities than STNG.

Assured Guaranty (AGO)

Rolling One-Year Beta: 0.52

Serving as a financial safety net for over $11 trillion in debt service payments since its founding in 2003, Assured Guaranty (NYSE:AGO) provides credit protection products that guarantee scheduled payments on municipal bonds, infrastructure projects, and structured finance obligations.

Why Do We Think AGO Will Underperform?

1. Net premiums earned contracted by 3.6% annually over the last five years, showing unfavorable market dynamics this cycle
2. Sales are projected to tank by 20.2% over the next 12 months as its demand continues evaporating
3. Underwhelming 7.8% return on equity reflects management’s difficulties in finding profitable growth opportunities

Assured Guaranty is trading at $90.68 per share, or 0.7x forward P/B. Check out our free in-depth research report to learn more about why AGO doesn’t pass our bar.

High-Quality Stocks for All Market Conditions

The market’s up big this year - but there’s a catch. Just 4 stocks account for half the S&P 500’s entire gain. That kind of concentration makes investors nervous, and for good reason. While everyone piles into the same crowded names, smart investors are hunting quality where no one’s looking - and paying a fraction of the price. Check out the high-quality names we’ve flagged in 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 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

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