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. That said, here are three low-volatility stocks to avoid and some better opportunities instead.
Dollar General (DG)
Rolling One-Year Beta: -0.47
Appealing to the budget-conscious consumer, Dollar General (NYSE: DG) is a discount retailer that sells a wide range of household essentials, groceries, apparel/beauty products, and seasonal merchandise.
Why Is DG Not Exciting?
- Poor same-store sales performance over the past two years indicates it’s having trouble bringing new shoppers into its brick-and-mortar locations
- Gross margin of 29.9% is below its competitors, leaving less money for marketing and promotions
- 5× net-debt-to-EBITDA ratio makes lenders less willing to extend additional capital, potentially necessitating dilutive equity offerings
Dollar General is trading at $103.68 per share, or 16.2x forward P/E. Check out our free in-depth research report to learn more about why DG doesn’t pass our bar.
Douglas Dynamics (PLOW)
Rolling One-Year Beta: 0.93
Once manufacturing snowplows designed for the iconic jeep vehicle precursor, Douglas Dynamics (NYSE: PLOW) offers snow and ice equipment for the roads and sidewalks.
Why Does PLOW Fall Short?
- Annual revenue growth of 1.8% over the last two years was below our standards for the industrials sector
- Capital intensity has ramped up over the last five years as its free cash flow margin decreased by 2.2 percentage points
- Shrinking returns on capital suggest that increasing competition is eating into the company’s profitability
At $29.98 per share, Douglas Dynamics trades at 13x forward P/E. To fully understand why you should be careful with PLOW, check out our full research report (it’s free for active Edge members).
NVR (NVR)
Rolling One-Year Beta: 0.23
Known for its unique land acquisition strategy, NVR (NYSE: NVR) is a respected homebuilder and mortgage company in the United States.
Why Are We Hesitant About NVR?
- New orders were hard to come by as its backlog was flat over the past two years
- Performance over the past two years shows its incremental sales were much less profitable, as its earnings per share fell by 2.1% annually
- Waning returns on capital imply its previous profit engines are losing steam
NVR’s stock price of $7,152 implies a valuation ratio of 17.5x forward P/E. If you’re considering NVR for your portfolio, see our FREE research report to learn more.
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 5 Growth Stocks for this month. 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-small-cap company Comfort Systems (+782% 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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