1 Safe-and-Steady Stock to Keep an Eye On and 2 That Underwhelm

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. That said, here is one low-volatility stock providing safe-and-steady growth and two stuck in limbo.

Two Stocks to Sell:

Burlington (BURL)

Rolling One-Year Beta: 0.77

Founded in 1972 as a discount coat and outerwear retailer, Burlington Stores (NYSE:BURL) is now an off-price retailer that has broadened into general apparel, footwear, and home goods.

Why Is BURL Not Exciting?

1. Large revenue base makes it harder to increase sales quickly, and its annual revenue growth of 9.3% over the last three years was below our standards for the consumer retail sector
2. Free cash flow margin shrank by 5.1 percentage points over the last year, suggesting the company is consuming more capital to stay competitive
3. Below-average returns on capital indicate management struggled to find compelling investment opportunities

Burlington’s stock price of $260.90 implies a valuation ratio of 25.9x forward P/E. To fully understand why you should be careful with BURL, check out our full research report (it’s free for active Edge members).

D.R. Horton (DHI)

Rolling One-Year Beta: 0.42

One of the largest homebuilding companies in the U.S., D.R. Horton (NYSE:DHI) builds a variety of new construction homes across multiple markets.

Why Are We Cautious About DHI?

1. Backlog has dropped by 15.5% on average over the past two years, suggesting it’s losing orders as competition picks up
2. Earnings per share have contracted by 8.5% annually over the last two years, a headwind for returns as stock prices often echo long-term EPS performance
3. Diminishing returns on capital suggest its earlier profit pools are drying up

At $153.56 per share, D.R. Horton trades at 13.8x forward P/E. Check out our free in-depth research report to learn more about why DHI doesn’t pass our bar.

One Stock to Watch:

Xylem (XYL)

Rolling One-Year Beta: 0.92

Formed through a spinoff, Xylem (NYSE:XYL) manufactures and services engineered products across a wide variety of applications primarily in the water sector.

Why Are We Positive On XYL?

1. Annual revenue growth of 14.8% over the past two years was outstanding, reflecting market share gains this cycle
2. Offerings are mission-critical for businesses and result in a top-tier gross margin of 37.7%
3. Earnings growth has trumped its peers over the last five years as its EPS has compounded at 17.7% annually

Xylem is trading at $137.51 per share, or 25.5x forward P/E. Is now the right time to buy? Find out in our full research report, it’s free for active Edge members.

Stocks We Like Even More

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 5 Growth Stocks for this month. 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.