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 two low-volatility stocks that could succeed under all market conditions and one that may not keep up.
One Stock to Sell:
Hamilton Insurance Group (HG)
Rolling One-Year Beta: 0.31
Founded in 2013 and operating through three distinct underwriting platforms across four countries, Hamilton Insurance Group (NYSE: HG) operates global specialty insurance and reinsurance platforms across Lloyd's, Ireland, Bermuda, and the United States.
Why Are We Hesitant About HG?
- Demand will likely fall over the next 12 months as Wall Street expects flat revenue
- Operational productivity has decreased over the last two years as its combined ratio worsened by 5.4 percentage points
- Earnings per share have contracted by 56.9% annually over the last one years, a headwind for returns as stock prices often echo long-term EPS performance
Hamilton Insurance Group is trading at $25.68 per share, or 0.9x forward P/B. Read our free research report to see why you should think twice about including HG in your portfolio.
Two Stocks to Watch:
Altria (MO)
Rolling One-Year Beta: 0.03
Best known for its Marlboro brand of cigarettes, Altria (NYSE: MO) offers tobacco and nicotine products.
Why Could MO Be a Winner?
- Differentiated product offerings are difficult to replicate at scale and result in a best-in-class gross margin of 70.9%
- Healthy operating margin of 55% shows it’s a well-run company with efficient processes
- Impressive free cash flow profitability enables the company to fund new investments or reward investors with share buybacks/dividends, and its expanding margin gives it even more flexibility
At $57.20 per share, Altria trades at 10.3x forward P/E. Is now the right time to buy? See for yourself in our in-depth research report, it’s free for active Edge members.
Merck (MRK)
Rolling One-Year Beta: 0.52
With roots dating back to 1891 and a portfolio that includes the blockbuster cancer immunotherapy Keytruda, Merck (NYSE: MRK) develops and sells prescription medicines, vaccines, and animal health products across oncology, infectious diseases, cardiovascular, and other therapeutic areas.
Why Will MRK Beat the Market?
- Massive revenue base of $64.23 billion in a highly regulated sector makes the company difficult to replace, giving it meaningful negotiating power
- Adjusted operating profits and efficiency rose over the last two years as it benefited from some fixed cost leverage
- Free cash flow margin jumped by 5 percentage points over the last five years, giving the company more resources to pursue growth initiatives, repurchase shares, or pay dividends
Merck’s stock price of $85.95 implies a valuation ratio of 9.7x forward P/E. Is now the time to initiate a position? Find out in our full research report, it’s free for active Edge members.
Stocks We Like Even More
Trump’s April 2025 tariff bombshell triggered a massive market selloff, but stocks have since staged an impressive recovery, leaving those who panic sold on the sidelines.
Take advantage of the rebound by checking out our Top 9 Market-Beating Stocks. 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. Find your next big winner with StockStory today. Find your next big winner with StockStory today
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