Stability is great, but low-volatility stocks may struggle to deliver market-beating returns over time as they sometimes underperform during bull markets.
Finding the right balance between safety and returns isn’t easy, which is why StockStory is here to help. That said, here are three low-volatility stocks that don’t make the cut and some better opportunities instead.
Clarus (CLAR)
Rolling One-Year Beta: 0.95
Initially a financial services business, Clarus (NASDAQ: CLAR) designs, manufactures, and distributes outdoor equipment and lifestyle products.
Why Are We Out on CLAR?
- 4.2% annual revenue growth over the last five years was slower than its consumer discretionary peers
- Cash-burning tendencies make us wonder if it can sustainably generate shareholder value
- Diminishing returns on capital from an already low starting point show that neither management’s prior nor current bets are going as planned
Clarus is trading at $3.58 per share, or 23.3x forward P/E. To fully understand why you should be careful with CLAR, check out our full research report (it’s free for active Edge members).
Watsco (WSO)
Rolling One-Year Beta: 0.70
Originally a manufacturing company, Watsco (NYSE: WSO) today only distributes air conditioning, heating, and refrigeration equipment, as well as related parts and supplies.
Why Is WSO Risky?
- Disappointing same-store sales over the past two years show customers aren’t responding well to its product selection and in-store experience
- Incremental sales over the last two years were much less profitable as its earnings per share fell by 4.2% annually while its revenue grew
- Shrinking returns on capital suggest that increasing competition is eating into the company’s profitability
At $341.53 per share, Watsco trades at 26.6x forward P/E. Dive into our free research report to see why there are better opportunities than WSO.
IMAX (IMAX)
Rolling One-Year Beta: 0.54
Originally developed for World Expo '67 in Montreal as an innovative projection system, IMAX (NYSE: IMAX) provides proprietary large-format cinema technology and systems that deliver immersive movie experiences with enhanced image quality and sound.
Why Does IMAX Worry Us?
- Annual sales declines of 1.2% for the past two years show its products and services struggled to connect with the market during this cycle
- Smaller revenue base of $377.7 million means it hasn’t achieved the economies of scale that some industry juggernauts enjoy
- Low returns on capital reflect management’s struggle to allocate funds effectively
IMAX’s stock price of $35.65 implies a valuation ratio of 24.9x forward P/E. Read our free research report to see why you should think twice about including IMAX in your portfolio.
High-Quality Stocks for All Market Conditions
Your portfolio can’t afford to be based on yesterday’s story. The risk in a handful of heavily crowded stocks is rising daily.
The names generating the next wave of massive growth are right here in 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 244% over the last five years (as of June 30, 2025).
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