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 are three low-volatility stocks to steer clear of and a few better alternatives.
Heartland Express (HTLD)
Rolling One-Year Beta: 0.83
Founded by the son of a trucker, Heartland Express (NASDAQ: HTLD) offers full-truckload deliveries across the United States and Mexico.
Why Do We Steer Clear of HTLD?
- Products and services are facing significant end-market challenges during this cycle as sales have declined by 14.2% annually over the last two years
- Free cash flow margin shrank by 12.7 percentage points over the last five years, suggesting the company is consuming more capital to stay competitive
- Shrinking returns on capital from an already weak position reveal that neither previous nor ongoing investments are yielding the desired results
Heartland Express is trading at $7.63 per share, or 8.6x forward EV-to-EBITDA. Read our free research report to see why you should think twice about including HTLD in your portfolio.
Fiserv (FI)
Rolling One-Year Beta: 0.32
Powering over 1 billion accounts and processing more than 12,000 financial transactions per second globally, Fiserv (NYSE: FI) provides payment processing and financial technology solutions that enable merchants, banks, and credit unions to accept payments and manage financial transactions.
Why Does FI Give Us Pause?
- Large revenue base makes it harder to increase sales quickly, and its annual revenue growth of 5.2% over the last two years was below our standards for the financials sector
- Below-average return on equity indicates management struggled to find compelling investment opportunities
Fiserv’s stock price of $63.69 implies a valuation ratio of 8x forward P/E. To fully understand why you should be careful with FI, check out our full research report (it’s free for active Edge members).
Simmons First National (SFNC)
Rolling One-Year Beta: 0.92
With roots dating back to 1903 and a presence across Arkansas, Kansas, Missouri, Oklahoma, Tennessee, and Texas, Simmons First National (NASDAQ: SFNC) is a regional bank holding company that provides banking and financial services to individuals and businesses.
Why Do We Avoid SFNC?
- Annual net interest income growth of 1.5% over the last five years was below our standards for the banking sector
- Earnings per share fell by 9% annually over the last five years while its revenue was flat, showing each sale was less profitable
- Tangible book value per share tumbled by 2.9% annually over the last five years, showing banking sector trends are working against its favor during this cycle
At $18.06 per share, Simmons First National trades at 0.8x forward P/B. If you’re considering SFNC for your portfolio, see our FREE research report to learn more.
Stocks We Like More
Fresh US-China trade tensions just tanked stocks—but strong bank earnings are fueling a sharp rebound. Don’t miss the bounce.
Don’t let fear keep you from great opportunities and take a look at Top 5 Strong Momentum Stocks for this week. 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-small-cap company Exlservice (+354% 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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