Stability is great, but low-volatility stocks may struggle to deliver market-beating returns over time as they sometimes underperform during bull markets.
Finding the right balance between safety and returns isn’t easy, which is why StockStory is here to help. That said, here are three low-volatility stocks that don’t make the cut and some better opportunities instead.
Shutterstock (SSTK)
Rolling One-Year Beta: 0.89
Originally featuring a library that included many of founder Jon Oringer’s photos, Shutterstock (NYSE: SSTK) is now a digital platform where customers can license and use hundreds of millions of pieces of content.
Why Does SSTK Worry Us?
- Choice to prioritize new users over monetization has resulted in weak growth in its average revenue per request
- Earnings growth underperformed the sector average over the last three years as its EPS grew by just 4.7% annually
- Free cash flow margin shrank by 21.2 percentage points over the last few years, suggesting the company is consuming more capital to stay competitive
Shutterstock’s stock price of $19.10 implies a valuation ratio of 3.3x forward EV/EBITDA. If you’re considering SSTK for your portfolio, see our FREE research report to learn more.
Incyte (INCY)
Rolling One-Year Beta: 0.35
Founded in 1991 and evolving from a genomics research firm to a commercial-stage drug developer, Incyte (NASDAQ: INCY) is a biopharmaceutical company that discovers, develops, and commercializes proprietary therapeutics for cancer and inflammatory diseases.
Why Do We Think Twice About INCY?
- Expenses have increased as a percentage of revenue over the last five years as its adjusted operating margin fell by 15.2 percentage points
- Free cash flow margin shrank by 13.5 percentage points over the last five years, suggesting the company is consuming more capital to stay competitive
- Diminishing returns on capital suggest its earlier profit pools are drying up
At $67.15 per share, Incyte trades at 11.6x forward P/E. Dive into our free research report to see why there are better opportunities than INCY.
WesBanco (WSBC)
Rolling One-Year Beta: 0.88
Tracing its roots back to 1870 in West Virginia, WesBanco (NASDAQ: WSBC) is a bank holding company that provides retail and commercial banking, trust services, insurance, and investment products through its subsidiaries across several Midwestern and Mid-Atlantic states.
Why Are We Cautious About WSBC?
- Muted 2.4% annual net interest income growth over the last four years shows its demand lagged behind its bank peers
- Products and services are facing significant credit quality challenges during this cycle as tangible book value per share has declined by 1.4% annually over the last five years
- Low interest coverage ratio indicates the company may struggle to service its debt obligations if operational performance deteriorates
WesBanco is trading at $30.13 per share, or 0.8x forward P/B. Check out our free in-depth research report to learn more about why WSBC doesn’t pass our bar.
High-Quality Stocks for All Market Conditions
Donald Trump’s victory in the 2024 U.S. Presidential Election sent major indices to all-time highs, but stocks have retraced as investors debate the health of the economy and the potential impact of tariffs.
While this leaves much uncertainty around 2025, a few companies are poised for long-term gains regardless of the political or macroeconomic climate, like our Top 5 Strong Momentum 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 Exlservice (+354% 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
