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华尔街日报3 Low-Volatility Stocks Walking a Fine Line
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 to steer clear of and a few better alternatives.
Home Depot (HD)
Rolling One-Year Beta: 0.70
Founded and headquartered in Atlanta, Georgia, Home Depot (NYSE:HD) is a home improvement retailer that sells everything from tools to building materials to appliances.
Why Are We Hesitant About HD?
- Disappointing same-store sales over the past two years show customers aren’t responding well to its product selection and store experience
- Widely-available products (and therefore stiff competition) result in an inferior gross margin of 33.4% that must be offset through higher volumes
- Incremental sales over the last three years were much less profitable as its earnings per share fell by 3.3% annually while its revenue grew
Home Depot’s stock price of $345.50 implies a valuation ratio of 23.3x forward P/E. Read our free research report to see why you should think twice about including HD in your portfolio.
H&R Block (HRB)
Rolling One-Year Beta: 0.03
Founded in 1955 by brothers Henry W. Bloch and Richard A. Bloch, H&R Block (NYSE:HRB) is a tax preparation company offering professional tax assistance and financial solutions to individuals and small businesses.
Why Are We Out on HRB?
- 5.3% annual revenue growth over the last five years was slower than its consumer discretionary peers
- Ability to fund investments or reward shareholders with increased buybacks or dividends is restricted by its weak free cash flow margin of 16.7% for the last two years
- Unchanged returns on capital make it difficult for the company’s valuation multiple to re-rate
H&R Block is trading at $43.57 per share, or 8.9x forward P/E. Check out our free in-depth research report to learn more about why HRB doesn’t pass our bar.
KB Home (KBH)
Rolling One-Year Beta: 0.46
The first homebuilder to be listed on the NYSE, KB Home (NYSE:KB) is a homebuilding company targeting the first-time home buyer and move-up buyer markets.
Why Do We Steer Clear of KBH?
- Demand cratered as it couldn’t win new orders over the past two years, leading to an average 21.6% decline in its backlog
- Earnings per share have dipped by 4.1% annually over the past two years, which is concerning because stock prices follow EPS over the long term
- Diminishing returns on capital suggest its earlier profit pools are drying up
At $56.82 per share, KB Home trades at 13.3x forward P/E. If you’re considering KBH for your portfolio, see our FREE research report to learn more.
Stocks We Like More
If your portfolio success hinges on just 4 stocks, your wealth is built on fragile ground. You have a small window to secure high-quality assets before the market widens and these prices disappear.
Don’t wait for the next volatility shock. Check out 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 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.