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.
Luckily for you, StockStory helps you navigate which companies are truly worth holding. Keeping that in mind, here are three low-volatility stocks to avoid and some better opportunities instead.
Jacobs Solutions (J)
Rolling One-Year Beta: 0.77
With a workforce of approximately 45,000 professionals tackling complex challenges from water scarcity to cybersecurity, Jacobs Solutions (NYSE:J) provides engineering, consulting, and technical services focused on infrastructure, sustainability, and advanced technology solutions.
Why Should You Sell J?
- Products and services are facing significant end-market challenges during this cycle as sales have declined by 6.2% annually over the last five years
- Earnings per share have contracted by 6.1% annually over the last two years, a headwind for returns as stock prices often echo long-term EPS performance
- Underwhelming 8.2% return on capital reflects management’s difficulties in finding profitable growth opportunities
At $139.15 per share, Jacobs Solutions trades at 17.4x forward P/E. Dive into our free research report to see why there are better opportunities than J.
Performance Food Group (PFGC)
Rolling One-Year Beta: 0.68
With a massive network spanning 155 distribution centers and delivering over 250,000 different food products, Performance Food Group (NYSE:PFGC) distributes food and food-related products to over 300,000 restaurants, convenience stores, theaters, and institutions across North America.
Why Do We Avoid PFGC?
- Products are reaching more customers as its unit sales averaged 6.9% growth over the past two years
- Poor free cash flow margin of 1.3% for the last two years limits its freedom to invest in growth initiatives, execute share buybacks, or pay dividends
- Rising returns on capital show management is making relatively better investments
Performance Food Group is trading at $94.90 per share, or 16.9x forward P/E. If you’re considering PFGC for your portfolio, see our FREE research report to learn more.
Atlas Energy Solutions (AESI)
Rolling One-Year Beta: 0.35
Building the world's first long-haul proppant conveyor system to reduce truck traffic, Atlas Energy Solutions (NYSE:AESI) mines and processes sand used as proppant to prop open fractures in oil and gas wells during hydraulic fracturing.
Why Are We Out on AESI?
- Efficiency has decreased over the last five years as its EBITDA margin fell by 38.5 percentage points
- Negative free cash flow raises questions about the return timeline for its investments
- Unfavorable liquidity position could lead to additional equity financing that dilutes shareholders
Atlas Energy Solutions’s stock price of $12.78 implies a valuation ratio of 10.2x forward EV-to-EBITDA. Check out our free in-depth research report to learn more about why AESI doesn’t pass our bar.
Stocks We Like More
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Stocks that made our list in 2020 include now familiar names such as Nvidia (+1,460% between June 2020 and June 2025) as well as under-the-radar businesses like the once-micro-cap company Tecnoglass (+1,552% between June 2020 and June 2025). Find your next big winner with StockStory today.