Low-volatility stocks may offer stability, but that often comes at the cost of slower growth and the upside potential of more dynamic companies.
Luckily for you, StockStory helps you navigate which companies are truly worth holding. Keeping that in mind, here is one low-volatility stock providing safe-and-steady growth and two that may not keep up.
Two Stocks to Sell:
American Eagle (AEO)
Rolling One-Year Beta: 0.89
With a heavy focus on denim, American Eagle Outfitters (NYSE:AEO) is a specialty retailer offering an assortment of apparel and accessories to young adults.
Why Does AEO Fall Short?
- 4.3% annual revenue growth over the last six years was slower than its consumer retail peers
- Estimated sales decline of 1.9% for the next 12 months implies a challenging demand environment
- Underwhelming 8.6% return on capital reflects management’s difficulties in finding profitable growth opportunities, and its shrinking returns suggest its past profit sources are losing steam
American Eagle’s stock price of $10.50 implies a valuation ratio of 8.3x forward P/E. Check out our free in-depth research report to learn more about why AEO doesn’t pass our bar.
Sherwin-Williams (SHW)
Rolling One-Year Beta: 0.58
Widely known for its success in the paint industry, Sherwin-Williams (NYSE:SHW) is a manufacturer of paints, coatings, and related products.
Why Are We Cautious About SHW?
- Core business is underperforming as its organic revenue has disappointed over the past two years, suggesting it might need acquisitions to stimulate growth
- Estimated sales growth of 2.5% for the next 12 months is soft and implies weaker demand
- 8.5 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 $357.95 per share, Sherwin-Williams trades at 29.1x forward P/E. To fully understand why you should be careful with SHW, check out our full research report (it’s free).
One Stock to Buy:
Cencora (COR)
Rolling One-Year Beta: 0.13
Formerly known as AmerisourceBergen until its 2023 rebranding, Cencora (NYSE:COR) is a global pharmaceutical distribution company that connects manufacturers with healthcare providers while offering logistics, data analytics, and consulting services.
Why Are We Backing COR?
- Massive revenue base of $310.2 billion gives it meaningful leverage when negotiating reimbursement rates
- Performance over the past five years was turbocharged by share buybacks, which enabled its earnings per share to grow faster than its revenue
- Stellar returns on capital showcase management’s ability to surface highly profitable business ventures
Cencora is trading at $283.95 per share, or 17.5x forward P/E. Is now the time to initiate a position? See for yourself in our in-depth research report, it’s free.
Stocks We Like Even More
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 Exlservice (+354% five-year return). Find your next big winner with StockStory today for free.