3 Low-Volatility Stocks in Hot Water

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. Keeping that in mind, here are three low-volatility stocks that don’t make the cut and some better opportunities instead.

Norfolk Southern (NSC)

Rolling One-Year Beta: 0.73

Starting with a single route from Virginia to North Carolina, Norfolk Southern (NYSE:NSC) is a freight transportation company operating a major railroad network across the eastern United States.

Why Are We Out on NSC?

1. Underwhelming unit sales over the past two years indicate demand is soft and that the company may need to revise its strategy
2. Falling earnings per share over the last two years has some investors worried as stock prices ultimately follow EPS over the long term
3. Free cash flow margin dropped by 11.8 percentage points over the last five years, implying the company became more capital intensive as competition picked up

Norfolk Southern’s stock price of $250.57 implies a valuation ratio of 19.1x forward P/E. Read our free research report to see why you should think twice about including NSC in your portfolio.

Abbott Laboratories (ABT)

Rolling One-Year Beta: 0.26

With roots dating back to 1888 when founder Dr. Wallace Abbott began producing precise, dosage-form medications, Abbott Laboratories (NYSE:ABT) develops and sells a diverse range of healthcare products including medical devices, diagnostics, nutrition products, and branded generic pharmaceuticals.

Why Are We Cautious About ABT?

1. Scale is a double-edged sword because it limits the company’s growth potential compared to its smaller competitors, as reflected in its below-average annual revenue increases of 1% for the last two years
2. Core business is underperforming as its organic revenue has disappointed over the past two years, suggesting it might need acquisitions to stimulate growth
3. Free cash flow margin dropped by 4.7 percentage points over the last five years, implying the company became more capital intensive as competition picked up

Abbott Laboratories is trading at $133.08 per share, or 25.1x forward P/E. Dive into our free research report to see why there are better opportunities than ABT.

LeMaitre (LMAT)

Rolling One-Year Beta: 0.66

Founded in 1983 and named after a pioneering vascular surgeon, LeMaitre Vascular (NASDAQGM:LMAT) develops and manufactures specialized medical devices used by vascular surgeons to treat peripheral vascular disease and other circulatory conditions.

Why Is LMAT Not Exciting?

1. Revenue base of $226.3 million puts it at a disadvantage compared to larger competitors exhibiting economies of scale
2. Operating margin didn’t move over the last five years, showing it couldn’t increase its efficiency
3. 8.9 percentage point decline in its free cash flow margin over the last five years reflects the company’s increased investments to defend its market position

At $83.32 per share, LeMaitre trades at 36x forward P/E. If you’re considering LMAT for your portfolio, see our FREE research report to learn more.

High-Quality Stocks for All Market Conditions

The market surged in 2024 and reached record highs after Donald Trump’s presidential victory in November, but questions about new economic policies are adding much uncertainty for 2025.

While the crowd speculates what might happen next, we’re homing in on the companies that can succeed regardless of the political or macroeconomic environment. Put yourself in the driver’s seat and build a durable portfolio 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-small-cap company Comfort Systems (+782% five-year return). Find your next big winner with StockStory today for free.