3 Low-Volatility Stocks That Concern Us

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 steer clear of and a few better alternatives.

Workiva (WK)

Rolling One-Year Beta: 0.69

Nicknamed "the Excel killer" by some finance professionals for its ability to eliminate spreadsheet chaos, Workiva (NYSE:WK) provides a cloud-based platform that enables organizations to streamline financial reporting, ESG, and compliance processes with connected data and automation.

Why Does WK Fall Short?

1. Operating profits and efficiency rose over the last year as it benefited from some fixed cost leverage
2. Projected 3.1 percentage point decline in its free cash flow margin next year reflects the company’s plans to increase its investments to defend its market position

At $76.92 per share, Workiva trades at 4.5x forward price-to-sales. To fully understand why you should be careful with WK, check out our full research report (it’s free).

Hormel Foods (HRL)

Rolling One-Year Beta: 0.10

Best known for its SPAM brand, Hormel (NYSE:HRL) is a packaged foods company with products that span meat, poultry, shelf-stable foods, and spreads.

Why Do We Steer Clear of HRL?

1. Shrinking unit sales over the past two years indicate demand is soft and that the company may need to revise its product strategy
2. Gross margin of 16.4% is below its competitors, leaving less money to invest in areas like marketing and production facilities
3. Earnings per share fell by 9.2% annually over the last three years while its revenue was flat, showing each sale was less profitable

Hormel Foods’s stock price of $24.53 implies a valuation ratio of 16.7x forward P/E. If you’re considering HRL for your portfolio, see our FREE research report to learn more.

Dolby Laboratories (DLB)

Rolling One-Year Beta: 0.68

Known for its iconic "D" logo that appears before countless movies and TV shows, Dolby Laboratories (NYSE:DLB) designs and licenses audio and video technologies that enhance entertainment experiences in movies, TV shows, music, and other media.

Why Do We Pass on DLB?

1. Sales trends were unexciting over the last five years as its 1.2% annual growth was well below the typical software company
2. Customer acquisition costs take a while to recoup, making it difficult to justify sales and marketing investments that could increase revenue
3. Day-to-day expenses have swelled relative to revenue over the last year as its operating margin fell by 2.2 percentage points

Dolby Laboratories is trading at $62.73 per share, or 4.3x forward price-to-sales. Check out our free in-depth research report to learn more about why DLB doesn’t pass our bar.

Stocks We Like More

Check out the high-quality names we’ve flagged in our Top 9 Market-Beating Stocks. 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-small-cap company Comfort Systems (+782% five-year return). Find your next big winner with StockStory today.