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 steer clear of and a few better alternatives.
Cracker Barrel (CBRL)
Rolling One-Year Beta: 0.79
Known for its country-themed food and merchandise, Cracker Barrel (NASDAQ: CBRL) is a beloved American restaurant and retail chain that celebrates the warmth and charm of Southern hospitality.
Why Are We Out on CBRL?
- Poor same-store sales performance over the past two years indicates it’s having trouble bringing new diners into its restaurants
- Forecasted revenue decline of 2.5% for the upcoming 12 months implies demand will fall off a cliff
- Performance over the past six years shows its incremental sales were much less profitable, as its earnings per share fell by 16.5% annually
Cracker Barrel is trading at $29.02 per share, or 31.4x forward P/E. To fully understand why you should be careful with CBRL, check out our full research report (it’s free for active Edge members).
Royalty Pharma (RPRX)
Rolling One-Year Beta: 0.20
Pioneering a unique business model in the pharmaceutical industry since 1996, Royalty Pharma (NASDAQ: RPRX) acquires rights to receive portions of sales from successful biopharmaceutical products, providing funding to drug developers without conducting research itself.
Why Are We Hesitant About RPRX?
- Products and services are facing end-market challenges during this cycle, as seen in its flat sales over the last two years
- Revenue base of $2.35 billion puts it at a disadvantage compared to larger competitors exhibiting economies of scale
- Expenses have increased as a percentage of revenue over the last five years as its adjusted operating margin fell by 4.4 percentage points
At $39.23 per share, Royalty Pharma trades at 7.9x forward P/E. If you’re considering RPRX for your portfolio, see our FREE research report to learn more.
Enact Holdings (ACT)
Rolling One-Year Beta: 0.58
Playing a critical role in helping first-time homebuyers access the housing market, Enact Holdings (NASDAQ: ACT) provides private mortgage insurance that enables lenders to offer home loans with lower down payments while protecting against borrower defaults.
Why Does ACT Worry Us?
- Stagnant net premiums earned over the last five years suggest the firm needs alternative growth strategies
- Operational productivity has decreased over the last two years as its combined ratio worsened by 11 percentage points
- Earnings growth underperformed the sector average over the last two years as its EPS grew by just 4.3% annually
Enact Holdings’s stock price of $37.71 implies a valuation ratio of 1x forward P/B. Dive into our free research report to see why there are better opportunities than ACT.
Stocks We Like More
If your portfolio success hinges on just 4 stocks, your wealth is built on fragile ground. You have a small window to secure high-quality assets before the market widens and these prices disappear.
Don’t wait for the next volatility shock. Check out our Top 9 Market-Beating Stocks. 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).
Stocks that made our list in 2020 include now familiar names such as Nvidia (+1,326% between June 2020 and June 2025) as well as under-the-radar businesses like the once-micro-cap company Tecnoglass (+1,754% 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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