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 are three low-volatility stocks that don’t make the cut and some better opportunities instead.
Boston Beer (SAM)
Rolling One-Year Beta: 0.15
Known for its flavorful beverages challenging the status quo, Boston Beer (NYSE: SAM) is a pioneer in craft brewing and a symbol of American innovation in the alcoholic beverage industry.
Why Do We Think Twice About SAM?
- 1.6% annual revenue growth over the last three years was slower than its consumer staples peers
- Subscale operations are evident in its revenue base of $2.05 billion, meaning it has fewer distribution channels than its larger rivals
- Forecasted revenue decline of 4.2% for the upcoming 12 months implies demand will fall off a cliff
Boston Beer is trading at $221.09 per share, or 23.2x forward P/E. Check out our free in-depth research report to learn more about why SAM doesn’t pass our bar.
UniFirst (UNF)
Rolling One-Year Beta: 0.57
With a fleet of trucks making weekly deliveries to over 300,000 customer locations, UniFirst (NYSE: UNF) provides, rents, cleans, and maintains workplace uniforms and protective clothing for businesses across various industries.
Why Does UNF Fall Short?
- Estimated sales growth of 1% for the next 12 months implies demand will slow from its two-year trend
- Incremental sales over the last five years were less profitable as its earnings per share were flat while its revenue grew
- ROIC of 7.4% reflects management’s challenges in identifying attractive investment opportunities, and its falling returns suggest its earlier profit pools are drying up
UniFirst’s stock price of $174.27 implies a valuation ratio of 21.1x forward P/E. If you’re considering UNF for your portfolio, see our FREE research report to learn more.
SAIC (SAIC)
Rolling One-Year Beta: 0.32
With over five decades of experience supporting national security missions, Science Applications International Corporation (NASDAQ: SAIC) provides technical, engineering, and enterprise IT services primarily to U.S. government agencies and military branches.
Why Do We Steer Clear of SAIC?
- Sales tumbled by 1.5% annually over the last two years, showing market trends are working against its favor during this cycle
- Estimated sales growth of 2.4% for the next 12 months is soft and implies weaker demand
- Underwhelming 11.9% return on capital reflects management’s difficulties in finding profitable growth opportunities
At $117.70 per share, SAIC trades at 12.3x forward P/E. Read our free research report to see why you should think twice about including SAIC in your portfolio.
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