2 Reliable and Stable Stocks with Strong Market Edges and 1 We Choose to Pass On

Evaluating Low-Volatility Stocks: What Investors Should Know

Choosing stocks with minimal price swings can offer peace of mind, but this approach doesn't always guarantee impressive long-term returns. Those who focus solely on stability might overlook investments with greater growth potential.

Striking the right mix between minimizing risk and maximizing gains is challenging. That's where StockStory steps in to provide guidance. Below, we highlight two low-volatility stocks that may deliver steady returns, along with one that could underperform.

Stock to Consider Selling

Grand Canyon Education (LOPE)

Beta (1-Year): 0.72

Grand Canyon Education (NASDAQ: LOPE), established in 1949, is an educational services company best known for its management of Grand Canyon University.

Reasons to Reconsider Holding LOPE:

• Student enrollment trends have been lackluster, indicating slower-than-expected adoption of the company’s offerings.
• Over the past five years, earnings per share have grown by just 7.4% annually, trailing behind industry peers.
• While free cash flow margin is projected to rise by 1.1 percentage points next year, this only suggests a modest increase in available capital for investment or shareholder returns.

Currently, Grand Canyon Education trades at $170.95 per share, reflecting a forward price-to-earnings ratio of 17.9.

Two Low-Volatility Stocks Worth Watching

Zoetis (ZTS)

Beta (1-Year): 0.62

Zoetis (NYSE: ZTS), spun off from Pfizer in 2013, has become the largest global company dedicated exclusively to animal health. The company develops and markets medicines, vaccines, diagnostics, and services for pets and livestock worldwide.

What Makes ZTS Stand Out?

• Share buybacks over the last five years have helped boost annual earnings per share by 10.5%, outpacing revenue growth.
• A robust free cash flow margin of 21.4% allows for consistent reinvestment and shareholder returns.
• With a leading 29.2% return on capital, Zoetis demonstrates strong management and effective capital allocation.

Zoetis is priced at $129.05 per share, with a forward P/E of 19.6. Wondering if it’s a good time to invest?

NMI Holdings (NMIH)

Beta (1-Year): 0.69

NMI Holdings (NASDAQ: NMIH) was created after the 2008 financial crisis to expand capacity in the mortgage insurance sector. The company offers insurance products that shield lenders from losses if borrowers default on their home loans.

Why NMIH Is a Strong Contender:

• Net premiums earned have grown at an annualized rate of 9.2% over the past two years, surpassing industry averages due to strong customer demand.
• The combined ratio has improved by 18.5 percentage points in five years, reflecting operational efficiency as the company has scaled.
• Book value per share has increased by 16.2% annually over the last five years, highlighting robust capital growth.

NMI Holdings is currently valued at $40.38 per share, with a forward price-to-book ratio of 1.2. Is this a buying opportunity?

Top Stocks for Any Market Environment

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