Low-volatility stocks may offer stability, but that often comes at the cost of slower growth and the upside potential of more dynamic companies.
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 are two low-volatility stocks that could offer consistent gains and one that may not keep up.
One Stock to Sell:
Trex (TREX)
Rolling One-Year Beta: 0.95
Addressing the demand for aesthetically-pleasing and unique outdoor living spaces, Trex Company (NYSE:TREX) makes wood-alternative decking, railing, and patio furniture.
Why Does TREX Worry Us?
- Muted 5.4% annual revenue growth over the last two years shows its demand lagged behind its industrials peers
- Performance over the past five years shows its incremental sales were less profitable as its earnings per share were flat
- Diminishing returns on capital suggest its earlier profit pools are drying up
Trex is trading at $62.71 per share, or 28.1x forward P/E. To fully understand why you should be careful with TREX, check out our full research report (it’s free).
Two Stocks to Watch:
DoubleVerify (DV)
Rolling One-Year Beta: 0.68
When Oren Netzer saw a digital ad for US-based Target while sitting in his Tel Aviv apartment, he knew there was an unsolved problem, so he started DoubleVerify (NYSE:DV), a provider of advertising solutions to businesses that helps with ad verification, fraud prevention, and brand safety.
Why Are We Positive On DV?
- Superior software functionality and low servicing costs are reflected in its stellar gross margin of 82.3%
- User-friendly software enables clients to ramp up spending quickly, leading to the speedy recovery of customer acquisition costs
- Healthy operating margin of 12.1% shows it’s a well-run company with efficient processes
DoubleVerify’s stock price of $15.62 implies a valuation ratio of 3.4x forward price-to-sales. Is now the right time to buy? Find out in our full research report, it’s free.
Griffon (GFF)
Rolling One-Year Beta: 0.90
Initially in the defense industry, Griffon (NYSE:GFF) is a now diversified company specializing in home improvement, professional equipment, and building products.
Why Could GFF Be a Winner?
- Operating margin improvement of 7.8 percentage points over the last five years demonstrates its ability to scale efficiently
- Additional sales over the last five years increased its profitability as the 32.6% annual growth in its earnings per share outpaced its revenue
- Free cash flow margin expanded by 10 percentage points over the last five years, providing additional flexibility for investments and share buybacks/dividends
At $77.53 per share, Griffon trades at 12.9x forward P/E. Is now a good time to buy? See for yourself in our comprehensive research report, it’s free.
High-Quality Stocks for All Market Conditions
When Trump unveiled his aggressive tariff plan in April 2024, markets tanked as investors feared a full-blown trade war. But those who panicked and sold missed the subsequent rebound that’s already erased most losses.
Don’t let fear keep you from great opportunities and take a look at 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 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-micro-cap company Kadant (+351% 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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