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 is one low-volatility stock that could succeed under all market conditions and two that may not deliver the returns you need.
Two Stocks to Sell:
Principal Financial Group (PFG)
Rolling One-Year Beta: 0.95
Founded in 1879 by a Civil War veteran seeking to provide financial security for families, Principal Financial Group (NASDAQGS:PFG) provides retirement solutions, asset management, and employee benefits to businesses, individuals, and institutional clients globally.
Why Are We Wary of PFG?
- Products and services are facing end-market challenges during this cycle, as seen in its flat sales over the last five years
- Stagnant net premiums earned over the last five years suggest the firm needs alternative growth strategies
- Book value per share tumbled by 1.5% annually over the last five years, showing insurance sector trends are working against its favor during this cycle
At $90.22 per share, Principal Financial Group trades at 1.6x forward P/B. Read our free research report to see why you should think twice about including PFG in your portfolio.
Annaly Capital Management (NLY)
Rolling One-Year Beta: 0.57
Operating as a real estate investment trust since 1996 with a focus on generating income from interest rate spreads, Annaly Capital Management (NYSE:NLY) is a diversified capital manager that invests in agency mortgage-backed securities, residential mortgage loans, and mortgage servicing rights.
Why Should You Sell NLY?
- Muted 4.7% annual net interest income growth over the last five years shows its demand lagged behind its banking peers
- Weak unit economics are reflected in its net interest margin of 0.5%, one of the worst among bank companies
- Falling earnings per share over the last five years has some investors worried as stock prices ultimately follow EPS over the long term
Annaly Capital Management is trading at $22.45 per share, or 1.1x forward P/B. Dive into our free research report to see why there are better opportunities than NLY.
One Stock to Watch:
Sprouts (SFM)
Rolling One-Year Beta: 0.66
Playing on the secular trend of healthier living, Sprouts Farmers Market (NASDAQ:SFM) is a grocery store chain emphasizing natural and organic products.
Why Are We Positive On SFM?
- Offensive push to build new stores and attack its untapped market opportunities is backed by its same-store sales growth
- Locations open for at least a year are seeing increased demand as same-store sales have averaged 7.7% growth over the past two years
- Expected revenue growth of 8.7% for the next year suggests its market share will rise
Sprouts’s stock price of $80.52 implies a valuation ratio of 15x forward P/E. Is now the right time to buy? Find out in our full research report, it’s free for active Edge members.
Stocks We Like Even 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 Growth Stocks for this month. 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
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